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The billionaire family behind Chanel will have pocketed $12.4 billion in payouts from the luxury brand\u2019s earnings over the past three years, contributing to a massive increase in their personal wealth and underpinning efforts to diversify away from high fashion.\u00a0<\/p>\n
The Wertheimers\u2019 Cayman Islands-based holding company for Chanel is to receive a\u00a0$5.7 billion dividend<\/a>\u00a0for 2023, the largest annual payout since the maker of expensive tweed ensembles and quilted flap bags began publishing results in London six years ago. This adds to the $1.7 billion for the previous year and $5 billion for 2021, according to filings.\u00a0<\/p>\n The windfall contributed to a 19% rise in the clan\u2019s net worth over the past year to $108 billion, and about a 26% increase since the 2021 dividend was paid, according to the Bloomberg Billionaires Index. The media-shy brothers Alain, 75, and Gerard, 72, are credited with owning equal shares in the closely held company, which they inherited as grandsons of one of the original business partners in Gabrielle \u201cCoco\u201d Chanel\u2019s perfume operation.<\/p>\n The Wertheimers are among an ultra-wealthy group of French citizens whose luxury goods and cosmetics fortunes have ballooned in recent years as consumers splash out on expensive handbags and perfume. They include Bernard Arnault, founder of LVMH and the world\u2019s richest person, L\u2019Oreal SA heiress Francoise Bettencourt Meyers, who is the wealthiest woman, and the family behind handbag maker Hermes International SCA.\u00a0<\/p>\n The most recent dividend proposed for the Wertheimers coincides with a softening of the luxury sector for some brands. Chanel is among the companies that have so far weathered the downturn in demand \u2014 revenues rose 16% last year to almost $20 billion. Chief Financial Officer Philippe Blondiaux said this year could mark \u201cmore significant investments in real estate.\u201d<\/p>\n At the same time, the Wertheimers\u2019 family office, Mousse Partners, has been using proceeds to invest in sectors outside of the industry. Last year, the firm headed by half-brother Charles Heilbronn was among a trio of France\u2019s wealthiest dynasties to help take private Rothschild & Co. investment bank.\u00a0<\/p>\n Mousse Partners has also invested in a wide range of startups including\u00a0Brightside Health<\/a>, digital advertising firm Brandtech Group, biotechnology company\u00a0Evolved by Nature<\/a>\u00a0and health-care provider Thirty Madison, according to statements.<\/p>\n The Wertheimers reap benefits from the way their empire is structured geographically. Cayman Islands doesn\u2019t impose taxes on dividends for local businesses while the UK, where Chanel is based,\u00a0doesn\u2019t typically levy withholding taxes<\/a>\u00a0on dividends paid from a British firm to another overseas.<\/p>\n<\/div>\nSubscribe to the CFO Daily newsletter to keep up with the trends, issues, and executives shaping corporate finance. Sign up<\/a> for free.<\/div>\n<\/div>\n