8 min read · Jun 6, 2023
In a humble convent orphanage in a quiet corner of France, we find a young girl named Gabrielle, stitching away at a garment.
With a needle and thread in her small, determined hands, she is absorbed in her creative world, oblivious to the cacophonous chatter of the other orphans around her…
Finally finding a skill that helps to block the harsh memories of a life marked by hardship and devoid of the glamour that her name, Coco Chanel, would one day signify.
Her fingers dance across the fabric, weaving dreams into threads. Every stitch, a silent pledge to herself; every creation, a step closer to the future she craves.
Who would think that in a few short years, she will rise above her circ*mstances to redefine the contours of luxury and high fashion?
In today’s video, at Old Money Luxury, we share a tale of transformation, of adversity spun into gold, describing the full story of Coco Chanel’s wealth, and how young Gabrielle went from abject poverty to a member of fashion’s “Old Money” elite.
The Wealth of Coco Chanel: From Poverty To “Old Money” In Fashion
1. Before Coco
Born on August 19, 1883, in Saumur, France, Gabrielle Bonheur Chanel experienced hardship from her earliest years.
Her mother, a laundrywoman, died when Gabrielle was only twelve, leaving her father, a nomadic street peddler, unable to care for his five children.
He placed the young Gabrielle and her two sisters in a stark, austere orphanage run by the Congregation of the Sacred Heart of Mary.
The socio-economic conditions of her early years were harsh, defined by poverty and uncertainty.
Yet, it was in these exacting conditions that the seeds of her future were sown.
In the orphanage, the nuns taught her to sew, a skill that proved invaluable, sparking a passion and proficiency that would ultimately change her destiny.
Life in the orphanage, though frugal and disciplined, played an instrumental role in molding Coco Chanel.
It was there that she developed her style aesthetics, inspired by the stark uniforms and the simplicity of life.
The minimalistic design, the muted colors, and the focus on comfort over ostentation became cornerstones of her fashion ethos.
From the stern yet caring nuns, she learned not just the art of sewing, but also the values of discipline, hard work, and perseverance.
These values would later become her guiding principles, helping her navigate the demanding world of fashion.
Little did she know, her journey from this humble beginning to becoming a fashion doyenne was just about to unfold.
2. From Gabrielle To Coco
Escaping the confines of the orphanage as a young woman, Chanel first found work as a seamstress in the early 1900s. By night, she was a café singer, charming crowds with her soulful voice in the cabarets of Vichy and Moulins from 1905 to 1908.
It was during this time that she acquired the nickname “Coco”, a moniker that would become her identity in the fashion world.
Though she briefly harbored dreams of a stage career, her destiny lay elsewhere.
Through her social connections in the cabaret scene, notably with the wealthy cavalry officer Etienne Balsan, Chanel entered the world of French high society.
Balsan lavished Chanel with an extravagant lifestyle, and perhaps more importantly, he introduced her to a network of influential individuals.
In 1910, with financial backing primarily from Balsan and subsequently from one of his friends, British industrialist Arthur “Boy” Capel, Chanel was able to open her first shop in Paris.
This millinery shop on Paris’s Rue Cambon marked her formal entry into the fashion industry. She began by selling hats, gaining popularity among the Parisian elite with her unique designs.
Now, Coco’s entrance into the fashion world was far from conventional. It was a strategic move that drew on her personal connections and an intuitive understanding of the shifting socio-cultural landscape.
The fashion industry at the time was dominated by lavish and impractical designs.
Against this backdrop, Chanel’s unique aesthetics, imbued with simplicity and elegance, began to attract attention. This was just the beginning.
As she prepared to revolutionize women’s fashion, she was also paving her way to unprecedented wealth.
3. №5 Heads For Number One
Chanel’s breakthrough in the fashion industry came in the 1920s, marked by two revolutionary introductions.
The first was her legendary perfume, Chanel №5.
Introduced in 1921, it was a radical departure from the heavily floral fragrances of the era.
The complex composition, designed by famed perfumer Ernest Beaux, was as audacious and unconventional as Chanel herself.
The perfume, which Chanel wanted to smell like a woman and not a flower, was an instant hit and became a timeless symbol of luxury and sophistication.
Around the same time, Chanel also revolutionized clothing design.
She bid adieu to the corseted silhouette of the time, introducing comfortable, practical, yet chic clothing. With her simple, elegant designs, she catered to the changing needs of post-war women.
Chanel’s designs — ranging from the iconic little black dress, the versatile Chanel suit, to the pioneering use of jersey fabric — were revolutionary.
These creations not only won her critical acclaim but also brought her considerable commercial success.
The brand ‘Chanel’ began to grow, fueled by these successful ventures. She expanded her boutiques, opening stores in Deauville and Biarritz, catering to the fashion needs of not just Parisian women but those across France.
She introduced a range of products, including clothes, accessories, and jewelry. Her boutiques became a symbol of luxury and echoed her exquisite taste and craftsmanship.
Chanel’s breakthrough innovations cemented her status in the fashion industry. She was not just an astute businesswoman but also a visionary who could anticipate and shape fashion trends.
As her brand grew, so did her wealth, moving her further away from her humble beginnings towards the status of “old money”.
4. The Scent of Wealth
From her small millinery shop on Rue Cambon, she expanded into a fully fledged fashion empire.
With the increasing popularity of her designs, her boutiques turned into lucrative businesses, enabling her to acquire an immense fortune.
Strategic relationships played a significant role in Chanel’s wealth accumulation.
Notably, her partnership with Pierre Wertheimer, a renowned businessman, propelled Chanel number 5 into a global bestseller.
In 1924, they formed Parfums Chanel, with Wertheimer getting 70%, Chanel receiving 10%, and the remaining 20% going to Théophile Bader, who brokered the deal.
Despite the small stake, this deal secured her a constant and substantial income that added to her wealth.
Chanel’s business model was as unique as her designs. She rejected the norms of the time and instead built a brand focused on the customer’s needs, comfort, and evolving societal norms.
The simplicity and functionality embedded in her designs catered to the modern, independent woman, earning her a loyal clientele.
Her emphasis on branding and reputation management, underscored by the iconic interlocking “C” logo and her own persona as the brand’s ambassador, set her apart in the competitive fashion industry.
Moreover, she had an astute understanding of the value of intellectual property.
She was one of the first designers to trademark her designs, protecting them from being copied and ensuring that she reaped the full financial benefits of her creations.
Chanel’s path to immense wealth was marked by a potent combination of innovation, strategic partnerships, and a groundbreaking business model.
In her hands, the fashion business transformed into a vehicle of wealth creation, propelling her to the echelons of fashion’s “old money” set.
5. The Dark Side of Coco Chanel’s Wealth
The dawn of World War II in 1939 imposed substantial upheavals on Coco Chanel’s personal life and flourishing enterprise.
Refined sensibility and artistic flair, the hallmarks of her eponymous brand, seemed incongruous against the backdrop of the stark realities engulfing war-torn Europe.
As the conflict escalated, Chanel confronted the harsh necessity of shuttering her couture boutiques, retaining only her perfume and accessories division in operation.
This abrupt decision led to unemployment for approximately 4,000 of her staff, catapulting Chanel into a phase of significant financial unpredictability.
Concurrently, Chanel’s behavior during the war years ignited intense controversy.
The focal point of this contentiousness was her intimate involvement with a high-ranking German Nazi officer, Hans Gunther von Dincklage.
This romantic association stirred widespread scandal, further fanned by persistent rumors of Chanel’s purported role as a Nazi operative.
These suspicions were predicated on a number of elements, including her privileged lifestyle in occupied Paris, which was afforded due to her connection with von Dincklage, and alleged meetings with Nazi officials.
Despite these accusations, she was never formally indicted or publicly scrutinized for her supposed Nazi affiliations.
Nevertheless, the damning allegations cast a long-lasting pall over her legacy.
They complicated her personal and professional life during an already tumultuous period, exacerbating her difficulties amid the global conflict.
The war years were undeniably a financial downturn for Chanel.
With her main couture business abruptly halted, her revenue streams witnessed a drastic plunge, thereby augmenting her monetary hardships.
The once prolific fashion house was reduced to a shadow of its former self, a bleak representation of the dark era the world was traversing.
6. Chanel’s Unexpected Comeback
In the 1950s, almost two decades after she closed her boutiques, Chanel staged an impressive comeback.
At the age of 71, she reopened her couture house. Many viewed her return as risky, and initial reactions to her new collections were lukewarm, especially in France where memories of her wartime activities still lingered.
However, the American and British press applauded her return, especially her reinvention of the Chanel suit and the little black dress — designs that had defined her pre-war collections.
As post-war women sought elegance intertwined with comfort, Chanel’s designs found a new audience. Her fashions, celebrating simplicity and freedom of movement, struck a chord with the modern woman.
Her comeback proved successful, both critically and commercially. The revival of her fashion house led to the consolidation of her wealth, which had suffered during the war years.
Revenue from her popular designs and her lucrative perfume business with the Wertheimers bolstered Chanel’s finances.
The woman who once sang in cabarets for a living was now a key player in the world of fashion’s “old money”.
7. Coco Chanel’s Legacy and Wealth Today
The impact of the Chanel brand on high fashion and luxury goods was, and remains, profound.
Despite her humble beginnings and the challenges she faced, Chanel successfully rebuilt her empire.
At the time of her death in 1971, Coco Chanel had accumulated considerable wealth.
Despite the challenges she faced during the war years, the successful revival of her brand in the 1950s had put her firmly back on the path to financial prosperity.
While her personal net worth remains somewhat elusive due to her private nature and complex business dealings, there’s no doubt that Chanel was one of the wealthiest women in the world.
Even after her death, Chanel’s wealth has continued to grow posthumously.
Chanel’s brand, guided by the astute leadership of Karl Lagerfeld for more than three decades, continues to thrive and expand.
Today, the House of Chanel is not just a fashion house; it’s a global powerhouse in the luxury goods market, spanning clothing, perfume, cosmetics, and accessories.
The Chanel brand’s current value is estimated to be in the billions, making it one of the most valuable and influential brands in the fashion industry.
A significant part of this value is rooted in Chanel’s enduring legacy - as the ethos of elegance, simplicity, and comfort that she championed continues to resonate with customers today.
