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Never Give Up: Coco Chanel's Bullish Domination of (Well Everything Really)

      While researching and writing this installment on Chanel, I was forced to face the harsh and hellish reality that Coco Chanel struggled to live through. And the ethereal fantasy that she longed to live in. Gabrielle "Coco" Chanel is a "thrilling example of a very strong woman from her youth, to her very final days. It is the very upbringing she took pains to deny, which allows us to understand her taste in men, clothes and even her career path"*1.

     Chanel was born in 1883 in Saumur, France. Chanel's history is rife with differing and often contradictory stories and histories, including stories often told by Coco herself.

However, the historical record shows that Chanel's early life was a struggle with abject poverty. Her father was a travelling salesman, who would stop in Saumur along his route. Gabrielle's mother was never married to Albert Chanel, and there are accounts of his already having and supporting an established middle class family in Auvergne. The two illegitimate daughters that Albert Chanel fathered with Gabrielle's mother were largely neglected by him. He didn't treat them as family, and would only pay attention to his lover while in Saumur. Just after Gabrielle's sixth birthday her mother died. Soon after their father abandoned them, leaving his two illegitimate daughters to fend completely for themselves. The two girls were separated, and Gabrielle was sent to spend the next seven years in an orphanage. It was there that she was taught the trade of seamstress. All of the children were commonly taught a trade to ensure their livelihood after expulsion (in their early teens) from the orphanage was ensured. Gabrielle learned to sew quickly, and soon became highly skilled. Eventually Gabrielle surpassed the skills of the teacher, and was sent to Paris to apprentice under a master. When she left to orphanage she struggled, not enjoying her time spent working under someone else. She held onto her hope of one day starting her own shop and designing for the creme de la creme of French society. It was this desire to elevate her standing and good genetics that allowed her to create an external character for herself to play, that of the aristocratic woman. A woman with intrigue, idea's and an inner strength. Not to mention stellar beauty. She often found herself acting the part so well that she even fooled herself. Creating webs of lies about her near and distant past, all in an attempt to purge herself of her shameful status in French society. Chanel was nothing if not strong, bold and intelligent. It was this intelligence that led her to realize at an early age that the only way to draw high society clients to her designs was to travel in the same social circles. Gabrielle was sure that given the chance, she would be able to sell her creative vision and bold style to the highest society ladies in all of Paris.

      The name "Coco" was created by Gabrielle in her short lived failed attempt to gain star status as a lounge singer. The failure gave her two things, access to wealthy single young men and even more importantly, a new name. Gabrielle began exclusively using Coco as her name. Allowing her to build an entirely new character around the new name. She became an aristocrat, a wealthy woman, a woman of learning and privilege, who knew how to use her power of attraction to get what she wanted. The true nature of Gabrielle was not left behind, but enhanced by the character of Coco Chanel. She used her belief in the power of a strong woman and her ability to bend the wills of even the most powerful of men, to her own ends.

Coco Chanel

     Chanel parlayed her feminine wiles as mistress to many very powerful and public men, into huge gains for herself. She would always be found in the presence of highly fashionable, creative, and often extremely wealthy bachelors. She has been linked romantically to some of the power brokers that called Paris home, including Stravinsky and Picasso and other emerging and culturally important figure. "By the time of the First World War, Coco had become a well established figure, mixing in circles with an artistic elite"*2. The first example of her using her beauty to her own benefit was her affair with Arthur Capel, an extremely wealthy playboy, who gave Chanel the seed money to open her first millinery [hat] shop in an extremely fashionable and desirable location just off the Champs d'Elysee. Which was an astounding success due equally to Chanel's access to wealthy patrons through Capel and her store's central and premium location.

Chanel and Arthur 'Boy' Capel in 1917

     "Chanel is often hailed as the label which actually established a world of High Fashion. Coco Chanel's outlook was modern: in her time, she was thinking about the duality of 'comfortable yet stylish' clothes for women, which is at the forefront of both High Street and Couture fashion today"*3. She was the first fashion designer to advocate for comfort of clothing for women. Going as far as to say that women would benefit if they cast aside their historic stifling fashions, and began to dress more 'manly'. Chanel refused to associate herself or her brand with the use of corsets, or other binding devices that were intended to increase a woman's beauty. Chanel instead focused on creating styles that combined the comfort and quality of her clothes with slim, sexy silhouettes that enhanced the female figure. Chanel also designed pants for women, a very daring feat for the early twentieth century, a period in which women were focused on hoop skirts, corsets and being uncomfortable for the sake of beauty and fashion. Chanel went on to perfect the little black dress that has since become a fashion staple in any woman's wardrobe.

Chanel's original "little black dress"
1927

 Many of her designs became instantly vogue in Paris' fashion circles. Chanel was always ahead of the fashion curve. And was heralded at the time as a true visionary. literally. She was able to predict and provide for the upcoming desires of women, and at times directed and pushed her vision of comfort and style onto the masses highly successfully.

     Shortly after her huge success in retail hat and clothing design, Coco Chanel started to experiment with perfumes- believing that perfume was just as important to a woman as the clothes she wears. Chanel began looking for a scent that was bold and classic at the same time. In her stores she started to sell some of her more successful attempts. In 1921 Chanel found a scent that she knew would be successful among women everywhere. But there was a single major problem. Chanel didn't have the substantial money required to start a perfumery that could compete against the large and established French firms. Conveniently Chanel knew who did.

Chanel and Pierre Wertheimer 1927

Pierre Wertheimer, one of Chanel's admirer's and a successful make-up company owner. Wertheimer had spent substantial time and effort trying to get close to Chanel, he was enamoured with her fresh and beautiful designs and was a devotee of her modern interpretation of womanhood. And his insider knowledge of the cosmetics and perfume industry gave him the opportunity to invest in her passion. The two quickly became one of Paris' most sought after power couples. Wertheimer struck a deal with Coco Chanel and started Parfums Chanel, to produce and sell her upscale perfumes, starting with Chanel No.5. Wertheimer provided the entire funding to start the company and used his contacts to increase Chanel's presence in the market. In exchange Wertheimer received a 70% stake in the ownership of the company. Chanel herself getting 10%. She did however get to keep the ownership of her store and her clothing profits solely to herself. Parfums Chanel was another success for Coco, and established her as a mainstay in Paris fashion circles. As sales rose year after year throughout the 1920's and 30's, Coco Chanel and her perfumes grew into an international sensation. With her huge success Chanel became angry and upset with the deal she had made with Pierre and the Wertheimer family. Arguing that the Wertheimer's were growing increasingly rich from her creativity, work and name. She demanded that the contract be renegotiated. The disagreement killed all former romantic feelings between Chanel and her former beau Wertheimer. In the late 1930's Chanel's business slowed and eventually closed as the Nazi occupation of France neared. "Her fashion business sputtered during the late 1930's [as more and more of her clients fled the country] and at 56 years of age Coco Chanel closed it when the Nazis invaded France. Coco Chanel found a new way to fight the Wertheimers during World War II. In fact, the Wertheimers fled the country in 1940, eventually landing in the United States. With the powerful Wertheimer family gone, Coco Chanel went to work trying to use new occupation regulations [against Jews being able to own or operate businesses in Nazi occupied territories] to take control of the Parfums Chanel partnership. But the savvy Wertheimers stymied that move, too. In their absence, they found an Aryan proxy to run their businesses and keep Coco Chanel at bay"*4.

Chanel and von Dincklage

"During World War II, Coco Chanel stayed in Paris, moving into the Hotel Ritz with her new paramour, Hans Gunther von Dincklage, a Nazi officer"*5. This is not an entirely accurate quote, Chanel actually had lived in the Ritz before the invasion began, but as the Nazi's took over Paris they took the hotel and used it as their district headquarters. Only the highest ranking and most important Nazi officers were given living quarters in the hotel, and most of the floors were re-purposed as offices. Chanel in fact had to get special dispensation to remain in the hotel, a process in which von Dincklage helped. 

Mlle. Chanel in her Ritz Suite



The Paris Ritz Hotel where Chanel lived.



Von Dincklage was more than a simple Nazi officer. His family was extremely wealthy German industrialists, and he was very interested in living a high lifestyle, drinking the best champagne, staying in the best hotels, and wearing the best clothes. On top of which, his actual job in the Nazi party was to be a highly skilled intelligence officer. Focused on infiltrating French society and documenting and reporting on French Resistance membership and activities in Paris, and ensuring that all laws and orders from Berlin were being followed by soldiers in France. It isn't a stretch to assume it was his intervention and counselling that led to Chanel lodging her complaint against the Wertheimer family. While the war turned from Nazi domination to Allied liberation, von Dincklage continued to work out of the Ritz organizing the Nazi attempt to hold off the Allies, until eventually being recalled to Berlin. Where any trace of him goes suddenly very cold. While, "Coco Chanel was arrested immediately after the liberation of France and charged with abetting the Germans"*6.

Chanel (middle) and Winston Churchill (far right)
with his son, out on a hunt.

 However, for some inexplicable reason Winston Churchill intervened on her behalf and requested that she be released. It has been asserted that Chanel was either working for British Intelligence Agency MI6, or that she took part in a super secret peace mission between the English and German governments. Both of which seem incredibly far fetched. "After her release, Coco Chanel immediately fled France for Switzerland. Meanwhile, Pierre Wertheimer returned to Paris to resume control of his family's holdings. Despite her absence, Coco Chanel continued her assault on her former admirer and began manufacturing her own line of perfumes...wishing to avoid a court battle...in 1947, he settled the dispute with Coco Chanel, giving her $400,000 and agreeing to pay her a 2 per cent royalty on all Chanel products [in perpetuity]."*7. An agreement that allowed Chanel to live out most of her life in the comfort in which she had become accustomed to. 

     "At 70 years of age in 1954, Coco Chanel returned to Paris with the intent of restarting her fashion studio. She went to Pierre Wertheimer for advice and money, and he agreed to finance her plan. In return for his help, Wertheimer secured the rights to the Chanel name for all products that bore it, not just perfumes. Once more, Wertheimer's decision paid off from a business standpoint...When Coco Chanel died in 1971 at the age of 87, the Wertheimers owned the entire Parfums Chanel operation, including exclusive right to the Chanel name."*8.

     Despite her lack of business sense Chanel was able to use her devotion to fashion, love of high society, and hard work ethic to elevate herself into the position that she always thought she deserved. Coco Chanel rubbed shoulders with world leaders and famous artists. She was surrounded by wealth and beauty her entire adult life. She single-handedly changed the direction of fashion. And she rewrote the way women viewed themselves, giving them a more comfortable fashion, that still allowed them to embrace their erotic femininity. And all because she was a strong driven woman, who refused to take no as an answer. And despite the fact that she would sleep her way to success, it was the men that she used that were her most devoted fans.

A Lesson in Buisness

Whoever thinks that fashion is all about design, and not about business is gravely mistaken. The business side of fashion seldom works smoothly. And there are constant financial hurdles or threats (such as take over bids) to be avoided. Which brings us to LVMH SA. LVMH is a really intriguing study in the business of fashion. They have succeeded in creating the first (but not only) multinational luxury conglomerate, and streamlined the entire process of taking their products to market. They own the entire process enabling them to take their products through research and development, production, and distribution and sales seemlessly. They are the original luxury Wal-Mart, if you will. With average annual sales numbers between 9-12 Billion USD. And 30,000 full time employee's. LVMH is a fashion behemoth that set out and succeeded in becoming fashions first giant. And I guarantee most people have shopped at an LVMH store, or bought an LVMH product in the last year.

The famed LVMH Tower

     What led to LVMH massive success was the friendly and personal acquisition policy LVMH used to eliminate their competition. After all, like DeBeer's, LVMH realized early that if you control the supply, the demand will surely grow. Only what they controlled wasn't diamonds, but "luxury". All of the constant acquisitions not only limited the competition and prevented pricing wars, but they also allowed for the absorption of the best materials, workmanship, and knowledge of production, from each and every one of the aquired companies. It also established an interconnected and fully operational distribution network and manufacturing facilities. This allowed LVMH to ensure that all of the products be built with care and quality. It also allowed fashion and cosmetic products to be delivered anywhere in the world faster than ever previously thought possible.

      So who is LVMH?
      Why haven't you heard of them? and what do they make?


History

The LVMH corporation is essentially a holding company that manages the leading creators of luxury goods. Named after the two largest members of the conglomerate, Moet Hennessey and Louis Vuitton. LVMH owns the largest, most brand recognized and dominant fashion, cosmetic, and lifestyle brands all under one single umbrella corporation.

Louis Vuitton's Logo

History of Louis Vuitton

 In 1885 Louis Vuitton left home and decided to strike out on his own, and head to Paris. He was 14 years old. He was poor, his family had always been poor and he realized early in life, that he had to find a new way to try to change his fortune. He decided that Paris was where the money was, and that he had to go towards the money, instead of simply toiling away as a labourer in his small town. Unable to afford a trip to Paris, Louis decided that nothing would possibly stand in his way, and walked. It took him a year to walk from his village of Anchay to the capital. And once there he jumped at the first opportunity, becoming an apprentice packer and trunk maker. Within ten years Louis became a master trunk maker, and became the exclusive packer for Empress Eugenie, and her ladies in waiting.



Charles Lindburgh



     In 1854, Louis opened his first shop and set to work producing innovative and well crafted luggage. His first success was the creation of flat topped trunks. Before this, all travel trunks were domed. This simple innovation propelled Vuitton into high demand. His simple, elegant, well thought out designs allowed Vuitton to become the supplier of luggage to the most famous people in the world. "The quality of the materials, the arrangement of interiors, and the finishings made Vuitton's deluxe trunks far superior to anything that had previously been produced"*1. His luggage was used by everyone from royalty, explorers, and trailblazers. Everyone from Czar Nicolas II to Charles Lindbergh travelled with Vuitton's durable, stylish, utilitarian luggage sets.



     To keep the luggage current and to prevent counterfeiting the material and designs would change annually, and to the specifications of the clients. This constant evolution and adaptability was key to Louis Vuitton's success. The company became experts at adapting to changes in style and vogue materials, and used that expertise to remain relevant when the world underwent dramatic changes in transportation. Vuitton quickly adapted and perfected construction of luggage for sea, rail, automobile and sky travel, giving the company the edge over all of the competition.

     Innovation plays an essential role in Vuitton's growth. Without the constant innovation in design, the company wouldn't have succeded.

    In 1890, Louis' son Georges invented the first tumbler lock to be put on luggage- thus preventing theft. It was the only luggage that offered built-in security for the traveller.

    Since its inception there has been huge numbers of counterfeit Louis Vuitton products on the market. As the success of Louis Vuitton boomed in the 1960's and 70's the cheaply made counterfeits coming out of Asia gained popularity, and began to really effect the value and prestige of the Louis Vuitton brand. "With the company's success and reputation for luxury came a vast wave of counterfeit Louis Vuitton products. One year before his death in 1970, Gaston Vuitton (the grandson) decided to take action against the counterfeiters by opening a store in Tokyo; by offering the real Vuitton product in the Asian market, he hoped to better inform customers and discourage the purchase and manufacture of imitations. The company also undertook a successful advertising campaign to battle the increase in counterfeiting."*2. Attempting to fight counterfeiter's seemed to be an unending battle. So,"The company allocated two percent of annual sales revenue to the unending battle against counterfeiters"*3. And then Vuitton began in a new direction, "Under Racamier [chairman], Louis Vuitton began to acquire companies with a reputation for high quality, purchasing interests in the couturier Givenchy and the champagne house Veuve Cliquot. Louis Vuitton's takeover philosophy was personal, courteous, and discreet, rather than systematically aggressive."*4

  
History of Moet Hennessey

     The  Moet story begins in 1743 with the creation of Moet et Cie, by Claude Moet and his son. Moet started out as a simple vintner, a glorified grape farmer that could blend fine artisan wines. His winery was a medium sized plot of land in the center of the French Champagne district. The first years were a struggle for Moet, despite Claude's insistence that the district where he grew his grapes was the best in all of France. Claude realized that his reliance on 'courtiers en vin' or distributors that would take his wine to market and sell it along with the other wines they represented. Claude thought favoritism played a far larger role in the sales of the wine than the actual wine itself. He decided that instead of letting the 'courtiers' decide his fate he would buy his own 'courtier en vin' office and start representing himself. He could focus on selling his own wine and presenting it as 'the best' in the market, a claim that many critics and connoisseurs agree with to this day. Once in office, Claude's business exploded, and his clients included mostly landed gentry, nobles and even royalty. In 1750 Moet established an account with Madam Du Pompadour, who ordered regularly for special events held in the royal court.

     In 1792, Claude Moet's death. And the company was willed to his grandson, Jean Remy. Remy was proven to be a skilled and cunning businessman, with a special talent for looking forward and anticipating the coming needs for the company. He expanded the vineyard and production facilities by buying up huge tracts of land within what would later become the Champagne district. Including the Abbey of Hautilliers- the land and buildings that housed the Benedictine monk Dom Perignon while he was undergoing experimentation to perfect his double fermentation process that would create Champagne.

    But what would really launch Jean Remy and Moet to international acclaim was the patronage and friendship of Napoleon. The friendship of the emperor was of mutual benefit. Moet treated Napoleon as the Emperor he was. Plying him with wine, building a special guest house complex for him and his entourage. This gave Remy a portal to reach the highest class of people, and the ability to sell them on his concept of luxury wines. The friendship of the Emperor led to Remy becoming one of the worlds most famous vintners- and sales of the Moet wines skyrocketed. Between 1820 and 1880 Moet's sales went from 20,000 to 2,500,000 bottles a year.

     To help the recovery from World War I, Moet et Cie created a new product. Dom Perignon vintage champagne. The new champagne was fussed over, only the best grapes and the highest quality of craftsmen were allowed anywhere near it. Remy's goal was to create the world's most perfectly balanced wine the world has ever tasted. And the continued success or the premier vintage champagne proves his success.

    Throughout the 1950's, 60's and 70's Moet continued to succeed. Using the profits from the growth in sales, the company financed a string of aggressive take overs. Including: Ruinart Pere + Fils (champagne), Mercier (winery), JA. Hennessey (cognac), Rozes (winery), Parfums Christian Dior (perfumes), Roc (cosmetics), Delbard (roses), and Armstrong Nurseries (roses). Moet dominated the Champagne districts land, diversified itself into other beverages and alcohol based products, and had even unintentionally became the worlds leading producer of roses, in a search for a way to use cutting edge botany to hybridize their grapes.

    The string of takeover's however had an unintended negative effect. It exposed Moet Hennessey  to the threat of a takeover. With the huge amounts of cash and credit tied up in the various takeover bids Moet was approached by the Louis Vuitton group, which offered a merger partnership instead of a hostile takeover. The Vuitton group offered Moet Hennessey the financial protection and stability that it drastically needed. The merger offered Moet Hennessey total autonomy, and ensured the firm had capital for further takeovers- a common and established holding company tactic to ensure continued prosperity.

     The offer of the merger seemed to benefit Moet Hennessey the most. Moet was three times the size of Luis Vuitton, and while the agreement was that the two corporate entities were to be equal partners, both the leadership and the stock percentages favored Moet Hennessey greatly. With the majority shareholders of Louis Vuitton only receiving a 16.5% ownership in the new partnership. The fear of Louis Vuitton was that they were being absorbed into the larger company and that they would no longer be in a decision making position. This sentiment led to internal strife and bickering between the two sides. Eventually the LV group tried legal battles and finally attempted a share buying war. After losing the bidding war, former Vuitton chairman Henry Racamier was forced out of the company. Racamier found that his shares had been bought out from under him by the person that he originally went to in order to get the bankrolling for his takeover attempt. After being stabbed in the back by the former ally, Racamier was rightfully angry- and left to create another luxury goods conglomerate, Orcofi SA., that would compete directly against his former employer.  

So as you can clearly see fashion has some pretty big business muscle behind it. It operates strictly as a business, and the atmosphere is constantly highly competitive. It can be assessed as cut throat in it's competition. If you are unsuccessful in fashion, you close your doors. But if you succeed don't expect to remain autonomous either. Creativity and fantasy in fashion is solely intended for the runway. Not the boardroom.

     

Here is a list of the daunting holdings of the LVMH SA

• Moet & Chandon (champagne)
• Champagne Mercier (champagne)
• Krug (champagne)
• Vins fins de Champagne SA (wineries)
• JA Hennessey (cognac)
• Thomas Hine & Cie (wine distribution)
• Edward Dillon & Co. (wineries)
• Belle Jardiniere (retail)
• Loewe SA (retail)
• Berluti (clothing)
• Celine (clothing and cosmetics)
• Parfums Celine
• Kenzo (clothing, cosmetics, perfumes)
• Givenchy (clothing, perfume, cosmetics) 
• Christian Lacroix (clothes, perfume)
• Parfums Christian Dior
• Guerlain (perfume)
• DFA Group (duty free retail)
• Sephora Holding (cosmetics)
• Le Bon Marche Rive Gauche (cosmetics)
• Franck & Fils (retail)
• Schieffelin & Co. (wine distribution)
• Domaine Chandon (US wine)
• Delbard (roses)
• Armstrong Nurseries (roses)
• Roc (cosmetics)
• Douglas Inernational (US wine distribution)
• Thomas Pink (shirts)
• Tag Heure (watches)
• Zenith (watches)
• Ebel (watches)
• Chaumet (watches)
• Hard Candy (cosmetics)
• Bliss Spa (cosmetics)
• BENEfit (cosmetics)
• Make up for ever
• co-own Fendi (with Prada)
• and there are more...