The little-known Wertheimer brothers who share an equal partnership with Chanel, took 2.5 billion in dividends in 2021 according to Bloomberg. How did they make such a killing during a worldwide pandemic?
The full price of Chanel handbags was carefully upped by $1000 each, three times during 2021. This reflected the scarcity of the product during the pandemic. Since luxury goods rely on scarcity to make them valuable, it stands to reason that the pandemic did just that. So much so, that Chanel has had to limit handbag sales to one bag per customer in China and Paris. It is also an attempt to curb the resale market. Currently, daigous are ruining the luxury market by purchasing quantities of goods and reselling them in their own countries, sidelining duties and taxes to make them cheaper to buy. By introducing a ‘two leathergoods per customer’ policy, this effectively takes them out of the equation.
The Wertheimer brothers have a staggering net worth of $90 billion, not limiting their investments to Chanel. Considering this, the 2.5 billion each in dividends represents a teeny tiny 4.5% of that worth. That’s about the price of a cup of coffee, to them. They just sit pretty on one of their multiple vineyards in France and raise the price of luxury handbags. But they’re not in it to be nice, they’re there to make money, which they have.
Here are some tips if you want to take home $2.5 billion in dividends from a company:
- Introduce a one or two-per-customer purchase policy to eliminate a lot of middlemen that appear to make immediate profits but later decimate the market
- never, ever put anything on sale, it’s tacky and stops all that vulgar stampeding
- do not sell on social media channels to eliminate fakes
- make the customer experience absolutely perfect
- raise prices on products in $1000 increments
Chanel now sits behind Louis Vuitton, Gucci and Hermes as a leading luxury brand worth $12.8 billion.
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