Evening couture dresses from evolved into an enlongated feminine style. Summer dresses have contrasting scintillating touches (e.g. rhinestone straps and silver eyelets). Coco designed a line for petite women in 1937.
Throughout the 1930s, Elsa Schiaparelli was competing more strongly with the House of , but this was only a short term rivalry. premiered an exhibition of jewelry in 1932 dedicated to the diamond. Several of the pieces, including the "Comet" and "Fountain" necklaces were re-introduced by Chanel in 1993.
When World War II began in 1939, Coco Chanel retired and moved into the Hotel Ritz Paris with her new beau, Nazi officer Hans Gunther von Dincklage. Only her parfums and accessories were sold in her existing boutiques.
When France fell under the control of Adolf Hitler's Nazi Germany in 1940, the Nazis made the Ritz their French headquarters. Pierre Wertheimer and his family fled to the United States in 1940,, and before Coco could take control of Parfums Chanel, Wertheimer made an "Aryan proxy" for the company. Rumors spread that Coco was on good terms with the Germans.
biographer Edmonde Charles-Roux states that German intelligence sent her to "visit Winston Churchill as a part of a secret peace mission. Coco Chanel was arrested immediately after the liberation of France and charged with abetting the Germans, but Churchill intervened on her behalf and she was released."
When France was liberated after the fall of the Nazi Empire, many French people meted out punishments to French women who were believed to have collaborated with the Nazis. Coco Chanel was without a doubt a target after the rumors, and so she fled to Switzerland.
In Coco's absence, Pierre Wertheimer returned to Paris to control Wertheimer family holdings. Out of spite, Coco created her own collection of perfumes.
Wertheimer felt his legal rights were infringed, but he wanted to avoid a legal battle and settled with Coco by giving her $400,000 USD, 2% royalty from all products, and gave her limited rights to sell her own perfumes in Switzerland. Coco stopped making perfumes after the agreement.
She sold the complete rights to her name to the Wertheimers for Perfumes Chanel, in exchange for a monthly stipend. The stipend supported her and her friend, von Dincklage.
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