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The Founder's Notes

The Strat · Episode 10 · The Rise Of

13 January 2026 · 10 min

Chanel

Stay private, never discount, and let the founder's myth do a century of work.

Listen on Spotify Read the teardown

From the show notes

As Coco Chanel famously said: “Fashion changes, but style endures.” And Chanel has clearly endured for over a century, so get to know its rise to prominence and impact in this episode.

Published as

10- The Rise of Chanel

§01 — What to listen for

Gabrielle Chanel opened a hat shop in Paris in 1910 and by the 1920s had rewritten what women wore — jersey, the little black dress, a perfume with a number instead of a name. Listen for the perfume deal with the Wertheimer family, which made her rich and made her furious, and for the fact that the Wertheimers still own the whole company today.

The strategy is private ownership and price discipline. Chanel does not answer to shareholders, raises prices rather than chasing volume, and treats its founder's biography — including the parts it would rather forget — as an asset. The full teardown reads the annual results the company began publishing in 2018.

The episode tells the story. The written case does what twelve minutes cannot: the business model, the moat, the statements, the valuation, and a verdict. Read the Chanel teardown.

§02 — The strategy, named

The mechanisms this episode demonstrates, in the same vocabulary the case library uses. Where a pattern has been written up, the claim is here; otherwise the tag is still in the queue.

§03 — Go deeper

10Luxury

Chanel

Wide moat · Watch it

Verdict

Watch it

Two consecutive years of comparable fashion revenue growth above 5% with operating margin back above 28% would settle it — that combination can only happen if Blazy's Chanel is selling at full price rather than being bought at the same rate as Viard's. Conversely, if margin stays in the mid-20s while Chanel keeps raising prices, then the pricing power I am crediting is really just an earnings pull-forward, and the moat is narrower than it looks.

§04 — More from The Rise Of

How twenty-four of the world's most valuable brands were actually built.

  1. 01NikeOwn the design and the demand, rent the factory, and sell what the shoe says about the person wearing it.6 min
  2. 02AmazonLose money on purpose for a decade, and build the infrastructure everyone else will have to rent.8 min
  3. 03AppleControl the hardware, the software and the store, and make leaving cost more than staying.13 min
  4. 04LululemonCharge double for a pair of leggings, and recruit the yoga instructor to explain why.10 min
  5. 05StarbucksSell the place, not the coffee, and charge a rent premium on every cup.12 min
  6. 06SephoraTake the makeup out from behind the counter, let the customer touch everything, and become the shelf every brand needs.11 min
  7. 07LongchampMake one folding nylon bag the entire company, and keep the family in charge of it.7 min
  8. 08McDonald'sSell hamburgers to the public, and sell real estate to the franchisees.11 min
  9. 09IKEAMake the customer do the assembly, the transport and the carrying, and give them the saving as the price.8 min
  10. 11DiorLaunch a house with a textile magnate's money, change the shape of women's clothes in one show, and license the name to the world.10 min
  11. 12GoogleGive away the best product on the internet, and charge whoever wants to stand next to the answer.13 min
  12. 13GucciNearly destroy the brand through family and licensing, then rebuild it around one designer at a time.9 min
  13. 14PradaMake luxury out of nylon, keep the company in the family, and treat the intellect as the brand.13 min
  14. 15Miu MiuLaunch a second house with the founder's nickname, aim it younger, and let it outgrow the first.8 min
  15. 16Tiffany & Co.Own a colour, put it on a box, and make the box worth more than most of what goes inside it.11 min
  16. 17HermèsLet the artisans set the pace, and turn a production constraint into the most valuable waiting list in retail.10 min
  17. 18GlossierBuild the audience before the product, and sell them what they told you they wanted.14 min
  18. 19NARSLet a makeup artist with a camera be the brand, and price the point of view.9 min
  19. 20M.A.C.Make the product for the makeup artist first, and let the professional's endorsement sell it to everyone else.10 min
  20. 21JBLBuild the speakers the cinemas and studios use, then sell that credibility to everyone else at a lower price.12 min
  21. 22BoseStay private, give the company to a university, and spend on research the way a public company never could.13 min
  22. 23XboxLose billions to buy a seat in the living room, then change the product from a box to a subscription.13 min
  23. 24PlayStationSell the console at a loss, make the money on every disc, and let a betrayal by Nintendo start the whole thing.10 min

Next · 11

Dior

Launch a house with a textile magnate's money, change the shape of women's clothes in one show, and license the name to the world.