Business

FAKE NEWS: Bernard Arnault Denies Rumor Of LVMH Bid For Chanel

By Donovan | April 16, 2018 0 Comments

Chanel Spring 2018 Ready-To-Wear.

PARIS — LVMH Moët Hennessy Louis Vuitton SE. did not put in a bid to purchase independent competitor, Chanel.

The group’s CEO, chairman and French business magnate Bernard Arnault, said “not so” at the company’s annual general meeting in Paris last Thursday (April 12). The luxury titan, flanked by members of the group’s executive committee onstage, was responding to a query during the meeting’s question and answer session.

When asked to comment on rumors that a senior LVMH executive had met with members of the Wertheimer family, which controls Chanel, to explore an acquisition, Arnault said: “Chanel is an outstanding business, but we are not in contact with them. I don’t know who told you that, but in my opinion, it’s fake news. There’s a lot of that around, you know.”

Louis Vuitton is the world’s biggest luxury brand. Arnault is the richest person in France and the fourth richest person in the world according to Forbes magazine, with a net worth of $75.5 billion, as of March 2018. In April 2018, he also became the richest person in fashion surpassing Zara’s Amancio Ortega.

Henri-Francois Pinault, the chairman and Chief Executive Officer of Kering, and Bernard Arnault, the chairman and Chief Executive Officer of LVMH, are two of the more recognizable names in fashion. Unlike the heads of Kering and LVMH – the two men who claim ownership of Chanel are far less publicly-known.

Alain and Gérard Wertheimer, the billionaire brothers who have privately held Chanel for over 30 years, are two of the least famous owners in fashion. Unlike Pinault and Arnault – regular front row fixtures at their brands’ seasonal runway shows – the Wertheimers have managed to largely shy from the public eye.

While little is known about the brothers, personally – “We’re a very discreet family, we never talk,” Gérard, told the Times in 2002 – we do know this: They each own half of Chanel and have a combined fortune of approximately €21 billion ($25.8 billion), per French financial magazine Challenges, which put the Wertheimers on the publication’s “top 10 richest French business tycoons” list in June 2018.

The Wertheimers are the grandsons of Pierre Wertheimer, who was an early business partner of the couturière Gabrielle “Coco” Chanel, herself. In 1924, Pierre Wertheimer entered into an agreement with Coco Chanel to create “Parfums Chanel.” For a seventy percent share of the company, Wertheimer agreed to provide full financing for production, marketing and distribution of Chanel No. 5. Théophile Bader – founder of the Paris department store, Galeries Lafayette – was given a twenty percent share.

The brothers, who began their work for the house roughly 43 years ago, are the third generation to run the 100+ year old company, which is reported to have brought in $5.67 billion in revenue in 2016. In addition to the Paris-based design house, the Wertheimers maintain a portfolio of investments that consists of three French vineyards, including Chateau Rauzan-Segla, and Wertheimer et Frere, one of the world’s top horse racing and breeding operations.

Gerard, 62, is based in Geneva. While Alain, 65, who lives in New York, has been credited with resurrecting the brand when he took over operational control from his father in 1974.

As the Times noted in 2002, the brothers “rarely, if ever, attend Chanel boutique openings or other Chanel events, they never lend their names to advertising, and they eschew licensing the company name for bedsheets and aerosols. ‘You can make money that way,’ Alain told Wine Spectator some years ago in one of his rare interviews. ‘But that’s not the way to run a family business.'”

As for how they have stayed so under-the-radar, Gerard said in 2002: “It’s about Coco Chanel. It’s about Karl. It’s about everyone who works and creates at Chanel. It’s not about the Wertheimers.”