Chanel owners pay themselves $3.4bn dividend – four times company’s net profit

chanel july 2017


Powered by Guardian.co.ukThis article titled “Chanel owners pay themselves $3.4bn dividend – four times company’s net profit” was written by Kim Willsher in Paris, for The Guardian on Wednesday 23rd August 2017 17.06 UTC

The reclusive billionaire brothers who own Chanel paid themselves a $3.4bn dividend last year.

Alain and Gérard Wertheimer, who have run the luxury goods company for more than 30 years, took more than four times the company’s net profit and double the dividend they received in 2015.

The payout is detailed in the annual report for Chanel International, the parent company for the haute-couture and prêt-à-porter fashion collections, as well as fragrance, beauty, watches and jewellery lines.

Gérard, 62, lives in Switzerland and Alain, 65, in New York. They are the grandsons of Pierre Wertheimer, one of designer Gabrielle “Coco” Chanel’s early business partners, and shun the limelight.

Asked why, the elder brother told the New York Times in 2002: “We’re a very discreet family. We never talk. It’s about Coco Chanel. It’s about Karl [Lagerfeld]. It’s about everyone who works and creates at Chanel. It’s not about the Wertheimers.”

Even before their dividend windfall, the French financial magazine Challenges claimed the brothers, worth a €21bn (£19bn), were among the top 10 richest French business tycoons in its rich list published in June.

The accounts reveal that the company’s revenue in 2016 was $5.67bn (£4.44bn), down from $6.24bn the previous year. Net profit was down 35%, from $1.34bn to $874m. Net operating profit was $1.3bn, a drop of 20% on the previous year.

The company said the disappointing results were due to “terrorist attacks in Northern Europe [that] impacted tourist flows and consequently luxury spending, which resulted in a negative performance in the first half of the year”.

However, the annual report added: “In the second half of the year, sales grew sharply … showing organic growth of 11% boosted by new launches and the creativity of the collections, in particularly the Cuba cruise collection. This, combined with the anniversary of a difficult end of 2015, helped to drive this overall growth.”

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