Virginie Viard is leaving the directorship of Chanel. The rumor, which has been circulating for a while, has been confirmed. The fact that just 15 days ago Leena Nair, the brand’s CEO, had publicly praised her work, especially in terms of sales, wasn’t enough. The $12.4 billion collected by the Wertheimer brothers’ holding company from Chanel’s dividends over the past three years was also not a good-enough reason. Now the hunt is on for a successor.
Viard is leaving the management of Chanel
In May, Bruno Pavlovsky, Chanel’s president of fashion, tried to squash rumors of Viard’s departure, and on May 21st, Business of Fashion published an interview with Nair, during which the CEO complimented Viard’s work. But on Wednesday, June 5th, Chanel confirmed its divorce from the designer, who has been at Chanel since 1987 and has taken on the role of creative director since Karl Lagerfeld’s death in 2019. Viard’s opponents speak of a decrease in the brand’s authority during fashion shows and the sumptuousness of marketing campaigns. In addition, the brand has appeared rather erratic with regards to its events. Chanel has collected several complaints (on social media) about the style shown on the runway , as well as negative opinions on product quality, even if price tags have skyrocketed.
Potential successors
A new creative organization “will be announced in due course”, says Chanel to Business of Fashion. Viard’s position became shaky when rumors pointed to Hedi Slimane leaving Celine and showing interest towards Chanel. Other sought-after designers on the market include former Valentino creative director Pierpaolo Piccioli, former Alexander McQueen designer Sarah Burton, and former Burberry designer Riccardo Tisci. And yet, Chanel may lean toward a low-profile name.
Economic implications
Brands usually make changes to creative direction when sales results do not reflect those expected. Yet, the Cayman Islands-based holding company of the Wertheimer brothers (Alain, 75, and Gerard, 72) will collect a record $5.7 billion dividend from Chanel for 2023. This is on top of the $1.7 billion for 2022 and the $5 billion for 2021. The 3-year total is $12.4 billion. Sure, as Forbes wrote, the results do not keep up with Louis Vuitton and Hermès. But they certainly aren’t shoddy. Bloomberg notes that the Wertheimers derive tax advantages from double shielding. On one hand, the Cayman Islands, where the family holding company is based, does not impose taxes on dividends for local businesses. While the United Kingdom, where Chanel is headquartered, generally does not impose withholding taxes on dividends paid by one British company to another abroad.
Pictured (Shutterstock) Viard with her mentor and predecessor, Lagerfeld
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