The design house's new global CEO takes aim at the next generation of luxury buyers
At a meeting with her leadership team in a sleek conference room high above New York, Maureen Chiquet, a slim 43-year-old with close-cropped hair, wears a dark couture jacket by legendary Chanel designer Karl Lagerfeld paired with superfine jeans and black Chanel boots. She and her team are strategizing about the launch of a new perfume. "Let's not be thinking about how big we can make this," says the new global head of one of the world's paramount--and most secretive--luxury brands, "but about how exclusive and special you can keep it."
It's a fair summary of Chiquet's strategy for the entire Chanel brand. In a transition planned since she joined Chanel in 2003, she rose from president of the Parisian company's U.S. division to the newly created global CEO post on Jan. 1. That's quite a trajectory for a St. Louis native who spent most of her career at Gap Inc. (GPS). Her aim is just as ambitious: to take a strong brand to the next level by appealing to a new generation of luxury shoppers. To do so, she is employing a consumer focus unusual for luxury retailing and borrowing a few tricks from Gap. "Maureen has gotten us to perceive the brand from the opposite side of the counter because she is the ultimate Chanel consumer," says Renette Zimmerly, Chanel's U.S. director of creative services.
Chiquet has proved adept at working within a corporate culture that is profoundly French. Chanel's creative headquarters is still 31 rue Cambon, where Gabrielle "Coco" Chanel opened her first Paris boutique in 1921. Chiquet has meshed with Chanel's creative egos, such as Lagerfeld, and its French owners, the Wertheimer family, whose two brothers are deeply involved in the business. They shun any public exposure and closely guard Chanel's financials. Analysts peg revenues at just over $3 billion.
While granting BusinessWeek her first major interview, Chiquet declined to discuss the Wertheimers. The oldest brother, Alain, 58, is Chanel's chairman and has a corner office down the hall from Chiquet. His art collection of modern masters, including Roy Lichtenstein and Chuck Close, hangs in the halls.
Intense competition in the luxury business led the family to create a global leadership position. Larger established brands like Louis Vuitton (LVMUY) and Gucci have deep-pocketed, publicly traded parents that own many hot, smaller brands like upstart Bottega Veneta. These giants have been more centrally controlled than Chanel, whose five regional heads have had a fair degree of autonomy, insiders say. That's given the big players an edge in running more consistent global brands. Now Chanel's presidents report directly to Chiquet. "It tightens the consistency and speed of decision-making," says Arie L. Kopelman, Chanel's vice-chairman. "When you factor in a far more competitive world, this is the only way to go."
Chiquet seemed destined for the job. She was the oldest of three sisters, and her father, a corporate lawyer, had a passion for French culture and spoke French fluently. By high school, speaking French was a major part of Chiquet's identity. At 16 she went to live with a French family in the town of Calvisson, near Nîmes, for four weeks. "I didn't want to have an accent," Chiquet says. "I wanted someone not to know I was American."
Chiquet attended Yale University, where she concentrated in literature, film, and theater. Edward S. Lampert, the investor and chairman of Sears Holdings Corp. (SHLD), who dated Chiquet's best friend while at Yale, says he saw a little of himself in how driven Chiquet was. "Even when she was friendly there was a seriousness about her," he says. Another classmate and close friend, Amanda Silver, points to one source of Chiquet's drive: "She had a strong relationship with her dad that propelled her to impress him."
After graduation, Chiquet got an entry-level job in Paris at French consumer product maker L'Oréal. It wasn't long before she became a brand manager and made presentations to the CEO. Chiquet says she secretly dated a French manager, Antoine Chiquet, in the marketing department. But when he was promoted to a new post in Asia she didn't want to follow. They decided to quit, get married, and move to San Francisco without jobs.
She landed as a trainee at Gap, and over the next 15 years rose to major merchandising positions at the company. At its Old Navy division, she was No. 2 under former head Jenny Ming. Besides being the best merchant Ming had ever seen in identifying styles shoppers would want, her ex-boss says, Chiquet knew every lever in expanding a business: "She could connect all the pieces." She became president of Gap's Banana Republic (GPS) unit in 2002, and won the Chanel job in 2003.
To claim it, Chiquet beat out more than 10 executives from the consumer-product, retailing, and luxury-goods industries. Kopelman says she had the best mix of business analytics combined with an ability to think creatively, a must to articulate the vision of Chanel's creative leaders. Chiquet's father negotiated her employment contract. "He was the best lawyer I knew," she quips.
BECOMING AU COURANT
After nearly a year spent in Paris to learn Chanel's culture, Chiquet succeeded Kopelman as U.S. president in 2004 as part of the ascension plan. Her intent has been to build a more modern image for Chanel. In apparel, for example, Lagerfeld constantly reinvents the brand in his couture and ready-to-wear collections, Chiquet says. But that newness wasn't always conveyed in the sale of $5,000 Chanel jackets and $2,000 handbags. Says Chiquet: "The risk of any great luxury brand that has its history in the past is that it can get dusty."
Like most designer-led luxury brands, Chanel traditionally pushed its product to market with little consumer input. Chiquet tripled the consumer research budget. In a meeting held in offices above Chanel's East 57th Street store, she and her team discuss a group they are targeting as a result of research: "new wealth." "More and more customers are acquiring wealth at earlier ages," Chiquet says, defining wealth as a net worth over $1 million. These women have more cutting-edge fashion tastes, and find Chanel's austere boutiques intimidating and high-end department stores boring. Dominic DeVetta, head of Chanel's U.S. sales to third-party retailers, outlines a plan to reach this group by selling Chanel in independent, high-end boutiques. Chanel is starting with Jeffrey's in New York and Maxfield's in Los Angeles, stores with unique points of view that will put a new spin on the Chanel brand. "Jeffrey's is geek chic and Maxfield's is totally rock 'n' roll," DeVetta tells the team, getting laughs.
The plan isn't without risk. Chanel could anger big accounts Neiman Marcus and Saks Fifth Avenue. Nor do some shops want to sell Chanel: "Chanel is so last year," says Debi Greenberg, owner of swank independent Louis Boston.
It's not surprising, then, that Chiquet wants to make the brand even more exclusive. She has expanded a category of "ultra-luxe" goods, which includes $26,000 alligator bags. But she's also applied a tactic from her Gap days called "must-haves." Chanel's U.S. boutiques used to buy the full assortment of collections in small amounts, which meant strong items would quickly run out. Now Chiquet encourages merchants to buy more of the items they think will be hot.
By all accounts, Chiquet has hit it off with her French colleagues. She's been careful to listen and learn. During her Paris stint, she says, "I spent nine months with a piece of tape on my mouth." Lyle Saunders, vice-president of U.S. creative, recalls meeting a few months ago in Paris with his French counterpart who was surprised to learn Chiquet was American. He knew she lived in the States, "but assumed she was French born and raised." Chiquet's father would be proud.