The billionaire family behind Chanel has reaped $12.4 billion in dividends from the luxury brand’s profits over the past three years, contributing to a big increase in their personal wealth and supporting their efforts to diversify away from luxury fashion.
Wertheimers’ Cayman Islands-based holding company for Chanel is set to receive a $5.7 billion dividend in 2023, its biggest annual payout since the maker of pricey tweed ensembles and quilted flap bags began reporting results in London six years ago. That’s on top of $1.7 billion the previous year and $5 billion in 2021, according to filings.
The windfall boosted the Chanel family’s net worth to $108 billion, up 19% over the past year and about 26% since dividends were paid in 2021, according to the Bloomberg Billionaires Index. Brothers Alain, 75, and Gerard, 72, who rarely make media appearances, are said to own equal shares in the privately held company, inherited as grandsons of one of Gabrielle “Coco” Chanel’s former business partners in her perfume business.
The Wertheimers belong to a group of ultra-rich French citizens whose luxury-goods and cosmetics fortunes have soared in recent years as consumers have spun money into pricey handbags and perfumes.The group includes LVMH founder and world’s richest man, Bernard Arnault, L’Oreal SA heiress Françoise Bettencourt Meyers, the world’s richest man, and the family behind handbag maker Hermes International SCA.
The latest proposed dividend for the Wertheimers coincides with a downturn in the luxury sector for some brands. Chanel has been one of the companies that has weathered the drop in demand so far, with revenue rising 16 percent last year to nearly $20 billion. Chief Financial Officer Philippe Blondiaux has said this could be a year of “greater investment in real estate.”
At the same time, the Wertheimers’ family office, Moos Partners, has been using its profits to invest outside the industry. Last year, the firm, led by half-brother Charles Heilbron, was one of three of France’s richest families to help take the Rothschild investment bank private.
Moose Partners has also invested in a wide range of startups, including Brightside Health, digital advertising firm Brandtech Group, biotech company Evolved by Nature and healthcare provider Thirty Madison, according to a statement.
The Wertheimers benefit from the way their empire is structured geographically: The Cayman Islands don’t tax dividends to local companies, while Britain, where Chanel is based, doesn’t typically impose withholding tax on dividends paid by British companies to overseas companies.
