PARIS — Alain Wertheimer, Chanel’s chairman and co-owner, is to assume management of the company following the surprise ouster of Maureen Chiquet, its global chief executive officer since 2007.
WWD.com was the first to report the news Wednesday afternoon, the day after Karl Lagerfeld paraded an eco-inspired couture collection that received wide praise from the global fashion press.
Chanel issued a short statement saying only that Chiquet would leave the company this week “due to differences of opinion about the strategic direction of the company.”
Company officials and Chiquet declined to comment beyond the brief statement.
Sources describe Chiquet as a confident executive particularly keen on leadership coaching and management seminars.
It is understood Chanel’s owners may have frowned on some of her outside activities: seeking publicity for her mentorship of New York-based jewelry designer Eddie Borgo, for example. One source in Europe suggested she had a book project in the works, believed to be about women in enterprise, which also might have raised eyebrows on Rue Cambon.
While most people contacted were surprised by the news, others thought that her tenure may have run its course. A few sources said there may have been some differences in corporate culture and, strategically and culturally, there were things she was pushing that the company was not prepared to do. They said she had a nice ride with the growth of the Chinese luxury market and the business overall was doing very well.
“I am stunned,” said Millard “Mickey” Drexler, ceo of J. Crew, whom Chiquet previously worked for at The Gap. “I know Maureen well. She is one of the most talented people I’ve had the privilege of working with. I’m incredibly surprised.”
He said she was “all around smart, shrewd and strategic. I’m a big fan of hers,” Drexler said.
The fashion group noted that over her nine-year tenure, the New York-based executive “oversaw the successful international expansion of the house of Chanel, enhanced its luxury positioning and timeless image, and grew the business in all categories. She also established a truly global organization and enhanced the culture and leadership of the company.
“She was also instrumental in fostering innovation, driving corporate social responsibility and establishing the Chanel foundation,” it added.
In a letter Wertheimer addressed to Chanel employees, seen by WWD, he echoed the official statement closely, while adding, “I am sure that she will be successful in her future activities.”
He also suggested his assumption of the ceo’s role is not an interim measure.
“The board of Chanel has decided not to replace Maureen but to entrust me once again with full responsibility for the leadership of the company,” he wrote. “I am confident in this role because of the great teams that are in place and the excellent condition of the company.”
Alain and Gérard Wertheimer, whose families control Chanel, were ranked number seven in the latest annual list of France’s richest people compiled by weekly news magazine Challenges. They slipped from number five with a fortune of 16.5 billion euros, or $18.4 billion, having sold the Bourjois brand.
According to Bloomberg, Chanel International BV files its global financial results with Kamer van Koophandel, the Dutch Chamber of Commerce. The most recent data is for 2014, which lists revenue of $7.5 billion and net income of $1.4 billion.
Perhaps the person at Chanel who will be least affected by Chiquet’s ouster is Lagerfeld, for he had largely frozen the American executive out of his affairs.
“I hardly knew her,” the designer told WWD on Wednesday. “We didn’t really work with her.”
Lagerfeld has repeatedly stated over the years that Chanel’s fashion business is essentially run by himself and three others: Bruno Pavlovsky, president of fashion activities; Eric Pfrunder, the company’s longtime image director of fashion, and Virginie Viard, the designer’s right-hand woman and creative studio director.
“We don’t talk to marketing people,” he told WWD in 2009. “We do what our inner voices tell us. We’re kind of the Joan of Arcs of the fashion business.”
While privately held Chanel does not disclose its financials, it is understood that the fast-growing fashion division has eclipsed its mighty beauty business in scale. Pavlovsky recently talked about the need to build larger boutiques in order to accommodate growing sales of ready-to-wear.
Last year, the company also decided to harmonize global pricing of its fashions — a daring move that resulted in a sharp increase in the cost of its handbags in Europe and a big drop in Asia.
Pavlovsky had characterized the new pricing policy — which caught some of the brand’s competitors off guard — as a way to ensure that customers are “seduced by the brand and by the products and not just led by these price differentials. It’s to prepare the brand for the next 10 to 15 years. It’s more about the future than the past.”
On Wednesday, Lagerfeld described a “Berlin Wall” between the fashion and beauty businesses at Chanel. And although he has occasionally collaborated on the perfume side, famously dressing Nicole Kidman for a No.5 ad in 2004, the designer has been critical of some of the choices made under Chiquet’s watch, including a No.5 campaign featuring Audrey Tautou in 2009.
That year, Lagerfeld took Tautou to task for remarks in an interview. Asked by the French edition of Premiere if she wears a lot of Chanel, she replied: “Sometimes. This morning, I wore the rain boots.”
“I didn’t even know we made rain boots,” Lagerfeld retorted in WWD. “After that, I don’t have to be nice.”
If he had his druthers, Lagerfeld said he would have suggested Penélope Cruz as a better role model for the storied French house.
With her mass background from The Gap, Chiquet was an unusual choice for Chanel when she was named president-elect in 2003 and the eventual successor to Arie L. Kopelman, who retired as Chanel president in December 2004 but continued as vice chairman of the board. Prior to joining Chanel in 2003, Chiquet was president of Gap Inc.’s Banana Republic division after holding several executive posts at Old Navy and the Gap. She joined Gap in 1988 as assistant merchandiser in the accessories division. She began her career at L’Oréal in Paris in 1985 as a product manager, having graduated from Yale University.
When Chiquet joined Chanel she immediately moved to Paris to spend a year working with senior management to understand the brand and strengthen international communications, operations and strategic planning. In October 2004, she relocated to New York as president and chief operating officer, directing all U.S. operations for beauty and fragrance, fashion, watches and fine jewelry. In January 2007, she was named global ceo, a new role at the company. Her mandate as global ceo was to guide Chanel well into the 21st century. She was charged with overseeing and coordinating all the company’s activities worldwide and reported directly to Wertheimer.
“She did a great job. I don’t know if they ever gave her full control. Maureen is one of the most effective luxury executives who’s been able to navigate a global and challenging environment while launching a number of new categories in a very fresh way in addition to driving the core business,” said Karen Harvey, ceo of the Karen Harvey Consulting Group. “She has done an exceptional job as a leader. People who have worked directly with her all over the world have been inspired by her.”
Harvey believes Chiquet will be able to select her next endeavor. “She’s at the top of every list when we do ceo searches,” she said.
“Their loss is somebody else’s potential gain,” agreed Jaimee Marshall, executive vice president of Kirk Palmer Associates, the executive recruiting firm. “For the open ceo searches that exist in our space, assuming she wants it, somebody will benefit from their decision to part ways.”
Marshall pointed out there’s a dearth of talent, and Chiquet’s combination of skills in both vertical specialty retail and the global luxury market are extremely rare.
“I have always thought she is one of the luxury fashion industry’s top executive talent. Karl has raised the bar so high creatively that this position requires strong leadership. It’s a big, big ship to steer while not diluting the brand equity, which from my view she has done very well,” said Kim Vernon, president and ceo of Vernon Co., an industry consultant.
In 2006, Chiquet sat down with WWD editor in chief Ed Nardoza at the WWD CEO Summit and spoke about the best piece of advice she ever got from Drexler at The Gap. She recalled her experience working in the denim department and said she was probably very arrogant. During a meeting, she told Drexler that something was “the greatest new finish,” and he kept asking questions. She gave him a hundred reasons explaining why and wasn’t listening to a word Drexler said.
“So I left the room and he called me later and he said, ‘You know, Maureen, you’re a great merchant, but you need to learn to listen.’”
And she said learning to listen was one of the greatest lessons that she had, because it wasn’t just listening to your boss, but listening to your consumers and the world around you.