Chanel valued at 100 billion euros

If anyone was thinking to purchase Chanel from the Wertheimer family, they can try again, unless they have 100 billion euros lying around. LVMH has expressed interest in purchasing what appears to be the most profitable luxury fashion house in the world after the death of their legendary artistic director Karl Lagerfeld, but LVMH analysts told investors at an investor day in Paris this week that Chanel is worth nearer to 100 billion euros, more than the 50 billion euros previously estimated.

If that price tag appears to be a lot for the world's largest luxury player to swallow. Earlier this year, Alain and Gerard Wertheimer went on record to say that Chanel was not for sale, although they have both reached retirement age. Chanel's perfumes, handbags, and tweed jackets are some of the biggest cash cows in the fashion industry, and that doesn't even speak to the brand's entire portfolio of offerings which range from fine jewelry to sunglasses.

The more likely exit route for the Wertheimer's given the vast price tag of Chanel would be for the company to launch an IPO, but for a company that has historically been private for so long, bringing in a board of directors and the design team having to answer to shareholders might not go over well.

In layman's terms, Chanel is too big to acquire. No other luxury player would want to eat up that cost of purchasing it, and 100 billion dollars is a lot of capital to acquire. Unless the Rothschild's or Morgan's want to step in, the Wertheimer's will have to seek alternatives as to what to do with Chanel if and when they decide to relinquish the company.


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