Deluxe: How Luxury Lost Its Luster (16 page)

In the
1930
s, luxury perfume brands introduced eau de toilette, which is
6
to
12
percent extract diluted with solvents such as ethanol and water, and it became commonplace in the
1950
s. Unlike eau de cologne, it smelled like a weaker version of the extract and sold for a fraction of extract prices. “Eau de toilette was created to take perfume to the street,” meaning to the middle market, Polge explained. “It was the beginning of the democratization of luxury perfume.”

Shortly after Bernard Arnault purchased Dior in
1985
, the luxury perfume business underwent a radical acceleration in creation, production, marketing, and consumption. At Dior, for example, in its first forty years, it created twelve perfumes—one every three or four years—including Miss Dior, Diorissimo, Diorella, and Eau Fraîche. In the twenty years since Arnault took over, Dior has introduced more than thirty. In
2005
alone, it launched four. Many are sequels: Dior’s
1985
hit Poison, for example, gave rise to Tendre Poison in
1994
, Hypnotic Poison in
1998
, and Pure Poison in
2004
.

In the
1980
s, when luxury brands began to focus more on the middle market, they marketed eau de parfum, a more potent product—it is
8
to
20
percent concentrate, blended with alcohol—that sells for slightly more than eau de toilette. A
1
.
7
-ounce bottle of Dior’s J’adore eau de parfum, for example, retails for $
62
; the same size eau de toilette is $
50
. It was a wise marketing ploy: by incorporating the word
parfum
(perfume) into the name of the product, luxury brands offered to the middle market what appeared to be a true luxury product, a piece of the dream. Perfume—known in the business as “extract”—is made of
15
to
30
percent concentrate blended with alcohol; it is still the most expensive scent product—J’adore perfume retails for $
215
an ounce—and makes up for a small slice of sales. It has, in fact, become like couture: a modest portion of the business, targeted to the rich. To reach more of the middle market, and to earn more profits, luxury brands have extended their perfume scents into other product categories such as body lotion and bath oil.

Today perfume in all its many forms is an essential component of a luxury brand. Old-time luxury brands that have nothing to do with fashion, such as the jewelers Cartier and Van Cleef & Arpels, all have perfumes. Newcomers such as Narciso Rodriguez and Stella McCartney have launched scents as soon as their fledgling companies could support it. Only one major luxury brand does not have one: Louis Vuitton. The company has a policy of strict control of distribution—it sells its products only in its own boutiques and Louis Vuitton sections of department stores—and it believes that is not a large enough retail network for a viable perfume business. Original perfume brands such as Coty have become corporate behemoths that churn out perfume products like Kraft makes cheese. Luxury brands dominate the perfume market: their glossy, gleaming counters clutter department stores, and their high-design packages dominate the shelves of duty-free stores, and perfume chains such as Sephora (owned by LVMH), shoving smaller houses such as Patou out of the picture.

The greatest challenge to luxury brand perfumes today is the recent rise of the celebrity perfume, such as Sarah Jessica Parker’s Lovely and Jennifer Lopez’s Glow, both produced by Coty. Celebrity perfumes have a short, explosive life: they hit the market with a tsunami of publicity, sell vast amounts to the middle market, and then disappear. And they have pushed luxury brands such as Chanel, Dior, and Givenchy to do the same. “The industry has educated consumers to be volatile,” said Michael Steib, a consumer goods analyst at Morgan Stanley in London. “The challenge for the big labels is to differentiate themselves from the other brands that are often discounted, have a very short shelf life, and are totally dependent upon the names associated with them.”

T
HE
G
RANDDADDY
of modern perfumes is Chanel No.
5
. World War II GIs fighting in Europe brought it home for their sweethearts. Mari lyn Monroe declared it was all she wore to bed. In
1959
, the Museum of Modern Art added No.
5
’s packaging to its permanent collection, and Andy Warhol produced a silk-screened image of the No.
5
bottle in a rainbow of colors. No.
5
’s spicy oriental bouquet is the scent that young perfumers try to duplicate: it is the standard by which one measures a nose. It is said that a bottle of No.
5
sells every thirty seconds somewhere in the world every day.

In
2003
, Chanel’s beauty business reportedly did $
1
.
6
billion in sales, thanks in large part to No.
5
. According to
Women’s Wear Daily,
No.
5
produces a profit margin of
40
percent—more than four times that of its competitors. This reliable and substantial profit allows Chanel’s owners, the Wertheimer family, to grow the company cautiously and invest in long-term projects, such as the Muls’ farm. “No.
5
is outside of fashion,” Jacques Polge told me over dinner in Antibes following my visit to the flower fields. “It comes from another era, and each year that passes, the more strange and foreign it becomes.”

Chanel’s founder, Gabrielle “Coco” Chanel, came from even more humble beginnings than Louis Vuitton. She was born in Saumur in
1883
, one of three daughters of a sickly mother and a philandering father who worked as a traveling salesman. After their mother died of tuberculosis when Gabrielle was eleven, their father deposited the girls at an orphanage in the rustic region of Auvergne and was never to be seen again. At eighteen, Gabrielle was sent to a Catholic boarding school where the nuns taught her how to sew. She worked as a shopgirl for a local lingerie company and moonlighted at a tailor’s shop. She spent evenings at the town’s cabaret, singing for soldiers stationed there. Her two standards were “Ko Ko Ri Ko” (Cock-a-Doodle Doo) and “Qui Qu’a Vu Coco?” (Who Has Seen Coco?), a ditty about a lost dog. The soldiers shouted “Coco!” when she sang them. The name stuck.

She made her way north toward Paris, where she became a courtesan and a milliner for the horse set. One of her beaux, the dashing polo player Arthur “Boy” Capel, set her up in a millinery business in
1910
at
21
, rue Cambon, a block west of Place Vendôme and directly behind the Hôtel Ritz. In
1912
, she opened a shop in Deauville, the Norman seaside resort and horseracing center for France, and in
1915
in the southwest Atlantic beach town of Biarritz. In
1918
, Chanel moved the Paris shop to
31
, rue Cambon, and it has been there ever since. She sold hats as well as a bit of ready-to-wear, which she fashioned out of soft, pliable jersey like that used for Capel’s polo shirts. It was a radical departure from the rigid taffetas and wools that were popular at the time.

In
1919
, Chanel was introduced to respected perfumer Ernest Beaux by her new lover, the grand duke Dmitri Pavlovich Romanov. Beaux was born to French perfumers in Russia in the
1880
s and grew up in Moscow to become the czar’s official perfumer. When the Romanov dynasty fell, Beaux fled Russia and moved to La Bocca, an inland town on the Côte d’Azur near Cannes. Chanel met Beaux at his laboratory there to discuss the idea of creating a perfume. Back then, perfumes primarily were monoflora—violet, rose, orange blossom—and packaged in extravagant bottles. Chanel found it boring. “I want everything in the perfume,” she told Beaux, “and nothing in the bottle.” Her brief was just as succinct: an abstract of flowers that would evoke the odor of women. Beaux whipped up a series of exotic
essais
(samples) that were so rich he needed something to balance them. He chose aldehydes, a group of organic compounds that have a chemical function like alcohol. “It was like putting lemon on strawberries,” Polge explained to me. Beaux presented his concoctions to Mademoiselle. She chose the fifth proposition and called it No.
5
.

Chanel No.
5
was, and still is, constructed of approximately eighty ingredients. The most important is jasmine, which since
1986
has been provided solely by Joseph Mul. There is ylang-ylang, an exotic flower that grows on the Comores Islands off the west coast of Africa, and patchouli, a dried leaf from Indonesia that was used as a repellent in silk shipments. There is orange blossom water and a variety of spices, particularly clove, which back in the
1920
s was one of the most popular spices for perfume. And there is a healthy dose of Joseph Mul’s Centifolia roses. For the flask, Chanel chose the most banal shape she could find, a chemist’s laboratory bottle. “Now it’s the Rolls-Royce of bottle design,” Polge said with a laugh, “but then it was very simple.” The rectangular cut-glass stopper was based on Paris’s elegant Place Vendôme.

Chanel decided to introduce No.
5
slowly, anonymously. First she did a test in Cannes: she invited Beaux and a few friends to dinner at a top restaurant, placed a bottle on the table and when a chic woman walked by, Chanel squeezed the atomizer bulb and filled the air with an invisible cloud of No.
5
. Each time the woman stopped, smelled, and appeared to be enchanted by the scent. Pleased with the results, Chanel returned to Paris and quietly launched No.
5
. She didn’t announce its arrival in the press or stock it in her store. She wore it herself, spritzed the shop’s dressing rooms with it, and gave bottles to a few of her high-society friends. Soon the buzz began: “Have you heard Mademoiselle Chanel has a perfume?” When the buzz rose to a clamor, Chanel instructed Beaux to put No.
5
into production. “The success was beyond anything we could have imagined,” recalled Chanel’s friend Misia Sert. “It was like a winning lottery ticket.”

Théophile Bader, the founder of the French department store Galeries Lafayette, wanted to sell No.
5
, but to fill the order, Chanel needed to expand production. Bader introduced Chanel to his friend Pierre Wertheimer, co-owner of the Bourjois cosmetics company. In
1924
, the trio hammered out a deal to incorporate Les Parfums Chanel: Wertheimer, who would produce No.
5
in his Bourjois factory, got
70
percent, Bader got
20
percent as a finder’s fee, and Chanel received a mere
10
percent. It didn’t take long for Chanel to realize she’d been crooked. She filed so many lawsuits to get more control and more profits—mostly to no avail—that by
1928
, the Wertheimers had a lawyer on staff who dealt solely with, as Wertheimer called her, “that bloody woman.”

Throughout the
1920
s, Chanel added new scents to her fragrance line: No.
22
in
1922
, Gardenia in
1925
, Bois des Isles in
1926
, and Cuir de Russie in
1927
. They were popular, but No.
5
surpassed them all and the competition, too: in
1929
, it was named the number-one-selling perfume in the world. By the
1930
s, Coco Chanel was earning $
4
million a year and reportedly had assets of $
10
million. “Under her glossy façade,” opined a French banker, “she is a shrewd, calculating peasant.”

When the Nazis arrived in Paris in
1940
, brothers Pierre and Paul Wertheimer—Alsatian Jews who feared persecution—fled to the United States. Once settled in New York, they sent an American named H. Gregory Thomas to Grasse to secure the formula and the primary ingredients to produce No.
5
in the United States during the war. While there, Thomas helped Pierre’s son Jacques escape, via Morocco and Portugal, to New York. Thomas was later named president of Chanel in the United States, a post he held for thirty-two years.

Chanel closed her fashion house but continued to live across the street at the Hôtel Ritz, a Nazi headquarters during the war, where she took up with a young Nazi officer named Hans Gunther von Dincklage. In an extraordinarily evil power play, Chanel denounced the Wertheimers to the Nazis. But the Wertheimers had anticipated her treachery. In
1943
, the family bought
50
percent of an airplane propeller company run by Félix Amiot, a French Aryan collaborator who sold arms to the German military. When Chanel turned coat, the Wertheimers signed Les Parfums Chanel over to Amiot, and the Nazis left the company alone. After the armistice, Amiot returned Les Parfums Chanel to the Wertheimers. Amiot’s help in protecting the Wertheimers’ company “saved his little neck” from the revenge-seeking Allies, Jacques’s son Alain Wertheimer told
Forbes
.

Chanel, however, was arrested by French resistance forces. She was released three hours later with the help, it was said, of Winston Churchill, a friend of another of Chanel’s former beaux, the Duke of Westminster. She immediately fled to Switzerland and continued to menace the Wertheimers. She threatened to produce her own version of No.
5
—which she would call Mademoiselle Chanel No.
5
—and two other new scents, and she filed a suit in France that charged that Les Parfums Chanel made an inferior product and demanded that it cease production and sales, and return ownership and rights to her. The Wertheimers negotiated a new deal with Chanel: instead of
10
percent of all French sales of No.
5
, she would have
2
percent of world sales and the right to produce her own scents (without the numeral
5
). She never did.