Founder of Chanel
Built a luxury house by taking things away — and licensed a perfume in a deal that shaped the rest of her life.
Photograph: Los Angeles Times · CC BY 4.0 · Wikimedia Commons
Chanel began as a milliner and moved into clothing, making her name by removing what fashion then required: corsetry, ornament, restriction. She used jersey — a cheap fabric associated with underwear — because it moved.
Chanel No. 5, launched in 1921, was produced and distributed under an arrangement with the Wertheimer family that left her with a small share of the perfume profits, and she spent decades fighting to change it. She eventually did: a post-war settlement gave her wartime profits and a 2% royalty on all No. 5 sales, which made her extremely wealthy. The lesson is about the terms she accepted at the start, not about how it ended.
The little black dress and the jersey suit were expensive things that looked plain. That is a difficult position to hold and an extremely durable one, because it cannot be copied by adding.
She won by subtraction while competitors added. In a crowded market where everyone competes by including more, the opening is often to strip something back — see [Blue Ocean Strategy].
She signed away most of the economics of her most valuable product early, when she needed capital and it looked like a sideline — and then spent thirty years and a great deal of litigation getting a better share. The terms you accept when you are small are the ones you spend your strongest years renegotiating.
Chanel is now perfume, cosmetics and accessories as much as clothing. What the brand means transferred; the original product was the vehicle.
Chanel's conduct during the German occupation of France is documented and damaging: she lived at the Ritz among German officers, had a relationship with a German officer who was an intelligence operative, and attempted to use antisemitic Nazi laws on Jewish-owned property to seize full control of the perfume business from the Wertheimers. That attempt failed.
The house is a case study in brand-building. The founder is a case study in how a reputation is managed, and the record is worse than the mythology.