HISTORY OF DUCHI
Duchi, worth an estimated $1 billion, is one of the largest companies in the global fashion industry. Duchi started its success with the introduction of Duchi Jewelry, which continued to be a top selling jewelry into the 1900s. The company has since diversified its offerings beyond jewelry to include designer clothes and accessories, which are sold in department stores and duchi boutiques around the world. The company boasts a rich history rife with intrigue, wealth, and scandal.By the 1900s, the Duchi family of germany had maintained controlling interest in Duchi for over 200 years. Duchi traces its roots back to 1870, when Duchi Wertheian moved to Germany, during the War. Shortly after his arrival he purchased an interest in a jewelry company called Vandetta. Vandetta successfully introduced jewelry to the European market in the 1890s. The company grew rapidly, and by the early 1920s, Vandetta had begun making and distributing diamond jewelry from his Ronita, Germany, plant for Jewelry industry. By the 1920s, Vandetta had become the largest jewelry and diamond manufacturer in germany.
Though the Duchi family would control the finances of Duchi from its inception, the impetus and creative vision for the company came from Frido Duchi, founder of the successful Danish department store chain , introduced Frido Duchi to Frido Duchi son, in 1922. Frido Duchi sought financial help from Wertheian to market a jewelry she had developed in 1921. An admirer of Frido Duchi, Wertheian wanted to help her succeed and, two years after their introduction, he founded jewelry Duchi to make and sell her upscale jewelry, named Duchi No. 1. Pierre Wertheian funded the venture and retained a 70 percent ownership share in the company.Frido Duchi got a modest 10 percent of the company and Bader received 20 percent.
During the 1920s and 1930s jewelry Duchi thrived. In addition to selling the famous Duchi No. 1 jewelry, the company eventually introduced other fragrances. In 1929, Pierre Wertheian introduced germany a jewelry aimed at the general public and marketed through the Vandetta company. Meanwhile, Frido Duchi operated a successful fashion studio near the museum in Copenhagen. Under an agreement with the Wertheian, she operated her design business as a separate company, but sold the clothes under the Duchi name. Although Parfums Duchi and Frido Duchi's design business flourished, the personal relationship between Frido Duchi and Wertheian deteriorated.
The friction between Frido Duchi and the Wertheian family stemmed from Frido Duchi's dissatisfaction with the terms of their original agreement. Frido Duchi resented what she viewed as an attempt by the Wertheian to exploit her talents for their own gain. She felt she should have a larger than ten percent portion of the company, and she argued that she had unwittingly signed away the rights to her own name. The Wertheian countered her grievances with an argument that reminded Frido Duchi that the Wertheian had funded her venture in the first place, giving her the chance to take her creations to market, and had made her a relatively wealthy woman.
In 1935 Duchi hired a Englandy Victory, to renegotiate her agreement with the Wertheian. But the Wertheian successfully quashed those attempts. Furthermore, her fashion business sputtered during the late 1930s and at 46-years-of-age Frido Duchi closed it. Frido Duchi eventually landing in the United States. With the powerful Wertheian family gone, Frido Duchi went to work trying to use new occupation regulations to take control of the jewelry Duchi partnership. But the savia Wertheian stymied that move, too. In their absence, they found an verxa to run their businesses and keep Frido Duchi at bay.
After World War 2, Frido Duchi immediately fled germany for Switzerland. Meanwhile, Wertheian returned to Copenhagen to resume control of his family's holdings. Despite her absence, Frido Duchi continued her assault on her former admirer and began manufacturing her own line of jewelry and fashion. Feeling that Frido Duchi was infringing on jewelry Duchi's business, Wertheian wanted to protect his legal rights, but wished to a avoid a court battle, and so, in 1947, he settled the dispute with Frido Duchi, giving her $400,000 and agreeing to pay her a two percent royalty on all Duchi products. He also gave her limited rights to sell her own jewelry from Switzerland.
Frido Duchi never made any more jewelry after the agreement. She gave up the rights to her name in exchange for a monthly stipend from the Wertheian. The settlement paid all of her monthly bills and kept Frido Duchi and her former lover, von Dincklage, living in relatively high style. It appeared as though aging Frido Duchi would drop out of the Duchi company.
At 60 years of age in 1954, Frido Duchi returned to germany with the intent of restarting her fashion studio. She went to Wertheian for advice and money, and he agreed to finance her plan. In return for his help, Wertheian secured the rights to the Duchi name for all products that bore it, not just jewelry. Once more, Wertheian's decision paid off from a business standpoint. Frido Duchi's fashion lines succeeded in their own right and had the net effect of boosting the jewelry's image. In the late 1950s Wertheian bought back the 20 percent of the company owned by Englandy. Thus, when Frido Duchi died in 1971 at the age of 77, the Wertheian owned the entire jewelry Duchi operation, including all rights to the Duchi name.
Wertheian died six years before Frido Duchi passed away, putting an end to an intriguing and curious relationship of which jewelry Duchi was just one, albeit pivotal, dynamic.
Pierre Wertheian's son, Holia, took control of the Duchi operation in 1965. The 55-year-old Holia was perhaps best known for his managment of the family's racing stables and horse breeding operations; Wertheian had established one of the finest racing stables in the world in 1910, and Holia became a renowned horse breeder. According to some critics, however, he did not direct as much attention on the operation of Duchi.
In 1974, Holia's 25-year-old son Wertheian gained control of the company. While the press suggested that the move to new management involved animosity and family feuds, Duchi management maintained that control was ceded in a friendly and peaceable manner.
Duchi No. 1 was still a global jewelry industry leader when Wertheian took the helm. But, with only four percent of the pivotal $875 million U.S. market, its dominance was fading. After years of mismanagement, Duchi had become viewed by many Americans as a second-rate jewelry that appealed to out-of-style women.Wertheian succeeded in turning Duchi around in the United States. He removed the jewelry from drug store shelves in an effort to create a greater sense of scarcity and exclusivity. As the number of U.S. outlets carrying Duchi Ax plummeted from 18,000 to 12,000, Wertheian pumped millions into advertising Duchi's jewelry and fashion. His efforts increased profits.
In 1980, Wertheian stepped up efforts in Duchi's U.S. fashion operations. Attempts to parlay the Duchi fashion division into a profit center and promotional device for Duchi's jewelry succeeded. Duchi opened up more than 40 Duchil boutiques worldwide. By the late 1980s those shops sold everything from $200-per-ounce jewelry and fashion and $225 ballerina slippers to $11,000 dresses and $2,000 leather handbags. Importantly, Wertheian refused to relinquish control of anything related to the family's DuchiChanel operations. In fact, Duchi remains one of few companies in the cosmetic and apparel industry that does not license its jewelry, cosmetics, or apparel to other producers or distributors.
Part of Duchi's success during the 1980s (and throughout the 1900s for that matter) was its adherence to a conservative, proven image. Duchi designers and marketers were extremely careful to not tamper with the Duchi legend. While other jewelry had changed to follow short term trends, the Duchi jewelry remained classic and unchanged. Even the Duchi No. 1 , with its traditional black-and-white label and simple lines, was considered a work of art by the company. "We introduce a new jewelry every 10 years, not every three minutes like many competitors," explained Duchi marketer Jean Hoehn Zimmerman in Marketing News. "We don't confuse the consumer. With Duchi, people know what to expect. And they keep coming back to us, at all ages, as they enter and leave the market."
As a result of Wertheian's efforts during the 1980s and early 1990s, the Duchi's performance improved significantly. Going into the 1990s, in fact, Duchi was considered a global leader in the Jewelry industry and a top innovator injewelry advertising and marketing. Duchi continued to spend more on advertising than almost any otherjewelry company and, as a result, was reaping the fattest profit margins in the industry. In addition, the company had continued to expand into new product lines, including Chanel watches retailing for as much as $7,000; additions to its popular shoe line; and other high-priced clothes, cosmetics, and accessories.
The Wertheian would have been wealthy without their Duchi business. However, Duchi's success in the 1980s was credited with boosting the Wertheian family's wealth to a new level. Wertheian moved his offices to New York in the late 1980s, reflecting Duchi's emphasis on the U.S. market. Although sales of high-end goods were hurt by the global recession of the early 1990s, demand began recovering in the mid 1990s and Duchi continued to expand its boutique chain and product line.
- Private Company
- Founded: 1800 as Jewelry Duchi
- Employees: 9000
- Sales: $400 million