Chanel, worth an estimated $1.5 billion, is one of the largest companies in the $4 billion global perfume industry. Chanel started its success with the introduction of Chanel No. 5 perfume, which continued to be a top selling perfume into the 1990s. The company has since diversified its offerings beyond perfumes to include designer clothes and accessories, which are sold in department stores and Chanel boutiques around the world. The company boasts a rich history rife with intrigue, wealth, and scandal.
By the 1990s, the Wertheimer family of France had maintained controlling interest in Chanel for over 100 years. Chanel traces its roots back to 1870, when Ernest Wertheimer moved from Alsace, France, to Paris during the Franco-Prussian War. Shortly after his arrival he purchased an interest in a French theatrical makeup company called Bourjois. Bourjois successfully introduced dry rouge to the European market in the 1890s. The company grew rapidly, and by the early 1920s, Bourjois had begun making and distributing skin creams from his Rochester, New York, plant for cosmetic industry giant Helena Rubenstien. By the 1920s, Bourjois had become the largest cosmetics and fragrance manufacturer in France.
Though the Wertheimer family would control the finances of Chanel from its inception, the impetus and creative vision for the company came from Coco Chanel. Theophile Bader, founder of the successful French department store chain Galeries Lafayette, introduced Coco Chanel to Ernest Wertheimer's son, Pierre, in 1922. Coco Chanel sought financial help from Pierre Wertheimer to market a fragrance she had developed in 1921. An admirer of Coco Chanel, Pierre Wertheimer wanted to help her succeed and, two years after their introduction, he founded Parfums Chanel to make and sell her upscale perfume, named Chanel No. 5. Pierre Wertheimer funded the venture and retained a 70 percent ownership share in the company. Coco Chanel got a modest 10 percent of the company and Bader received 20 percent.
During the 1920s and 1930s Parfums Chanel thrived. In addition to selling the famous Chanel No. 5 perfume, the company eventually introduced other fragrances. In 1929, Pierre Wertheimer introduced Soir de Paris, a fragrance aimed at the general public and marketed through the Bourjois company. Meanwhile, Coco Chanel operated a successful fashion studio near the Louvre museum in Paris. Under an agreement with the Wertheimers, she operated her design business as a separate company, but sold the clothes under the Chanel name. Although Parfums Chanel and Coco Chanel's design business flourished, the personal relationship between Coco Chanel and Pierre Wertheimer deteriorated.
The friction between Coco Chanel and the Wertheimer family stemmed from Coco Chanel's dissatisfaction with the terms of their original agreement. Coco Chanel resented what she viewed as an attempt by the Wertheimers to exploit her talents for their own gain. She felt she should have a larger than ten percent portion of the company, and she argued that she had unwittingly signed away the rights to her own name. The Wertheimers countered her grievances with an argument that reminded Coco Chanel that the Wertheimers had funded her venture in the first place, giving her the chance to take her creations to market, and had made her a relatively wealthy woman.
In 1935 Chanel hired a Parisian attorney, Rene de Chambrun, to renegotiate her agreement with the Wertheimers. But the Wertheimers successfully quashed those attempts. Furthermore, her fashion business sputtered during the late 1930s 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 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.
During World War II, Coco Chanel stayed in Paris, moving into the Hotel Ritz with her new paramour, Hans Gunther von Dincklage, a member of the German information service. According to one of Coco Chanel's biographers, Edmonde Charles-Roux, she played a role in a secret peace mission near the end of the War. Charles-Roux contends that German intelligence sent Coco Chanel to visit Winston Churchill as part of a secret peace mission. Coco Chanel was arrested immediately after the Liberation of France and charged with abetting the Germans, but Churchill intervened on her behalf and she was released.
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 ad