Jan 12, 2014
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Chanel’s profitability was twice that of LVMH

Jan 12, 2014

Chanel’s finances may be even more amazing than they seem, and that’s putting it mildly. The group’s rate of return increased to 25% after tax, compared to 12% for LVMH group and 21% for Hermès at the end of fiscal year 2012.

Chanel Euro Brooch, Spring/Summer 2008 (DR) (DR)

That’s what the Chanel group’s 2012 confidential accounts show, as revealed in part by the magazine Challenges. The financial magazine somehow gained access to the audited accounts “as approved by the shareholders during a meeting held on 19 November 2013.” A meeting held not in Neuilly-sur-Seine, where Chanel SA’s headquarters are located, but in the village of Zoetermeer, in the Netherlands, home to Chanel International BV, the holding company that controls the French luxury group.

Behind the scenes at the “Métiers d'Arts” fashion show, Dallas, December 2013 (Benoît Peverelli via chanel.com)

True to form, the company declined to comment when contacted; being privately held, it isn't required to. Documents filed with the Dutch chamber of commerce showed annual turnover of 6.3 billion dollars (4.6 billion euros), up 7% as compared to fiscal year 2011. Exchange rate fluctuations aside, this seems to correspond to estimates of the company’s revenues as published last year by the American agency Bloomberg. The agency’s estimate thus put the group’s value at nearly 20 billion dollars. Chanel’s operating results, also according to Challenges, rose in 2012 to 1.46 billion dollars, up 17% as compared to the preceding fiscal year.

Challenges notes that the fortune of Alain and Gérard Wertheimer, owners of the group and patrons of Karl Lagerfeld for over 30 years, may therefore well exceed the 20 billion dollar mark, thanks to the increase in the company’s value, which has more than tripled in four years.

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