CHANEL No 1? : Its look is timeless, its fans loyal but diverse. Who buys? And what’s the allure?

A group of reporters once asked Marilyn Monroe what she wore to bed. “Chanel No. 5,” the screen legend purred.

Chanel has long been on the lips of women of style, and some fashion arbiters have called its creator, Gabrielle Chanel, the designer of the century.

The arrival of the Chanel boutique in South Coast Plaza, Costa Mesa, five years ago this month, was so anticipated that an exclusive pre-celebration party and fashion show was held weeks before the doors were open and the first bag was sold.

“The major stores that carry it in the U.S. consider it money in the bank,” says Alan G. Millstein, editor of the Fashion Network Report, who has recently studied the company. “It’s the most consistent moneymaker, as far as French imports are concerned, and it’s the single most important import line to the U.S. from France. Their fragrance is the single best-selling fragrance worldwide.”

A recent survey of European women showed the Chanel name rated No. 1 in fashion, ahead of Yves Saint Laurent, Christian Dior and Calvin Klein.

Chanel also tops records as one of the most counterfeited and imitated names. Recent crackdowns on sweatshops showed that an illegal industry rakes in millions from copycat Chanel.

All this from a company started before World War I by the liberated Frenchwoman Chanel, who was called “Coco” by her intimates, a stellar roster that included Stravinsky, Diaghilev, Picasso, Cocteau, Dali and the Duke of Westminster.

Hers is an enduring label in the fickle world of fashion for a reason: its ability to change with the times while appearing timeless.

“Fashion passes; style remains,” she believed.

Chanel is also one of the few fashion lines that can be considered cross-generational, cross-cultural and schizophrenic in an appealing sort of way. It has something for everyone, for the quietly elegant and the brassy self-promoter, for the conservative and the hip, the grandmother, mother and daughter.

The only commonality among shoppers who worship at the altar of Chanel is that they have cash. A fair amount of it too, judging by the $1,200 price tags on handbags, $3,000 average for a ready-to-wear suit (much more for the couture) and even a steep $19.50 for lipstick.

A decade ago, one could make the blanket statement that Chanel loyalists were women in their 50s and 60s.

But now there are devotees in their 20s, and the average customer is 35 to 45, says Barbara Cirkva of Chanel Inc. Some of those who prove the age shift: Princess Caroline, Nicole Kidman, Winona Ryder and Anjelica Huston.

“Chanel is almost a state of mind, a way of life,” Cirkva says. “It’s what it represents, more than the object you’re buying. It’s feminine, it’s good quality and it’s French. For the customer, that cachet of being distinctly French is still very important.”

The current success of the line, however, can be attributed to a German, Karl Lagerfeld, who has designed the line since 1983. The larger-than-life designer, who races around with a powdered ponytail, dark sunglasses, black clothes and ever-present hand-held fan, is a man who sleeps little.

He runs on Diet Coke, speaks four languages with machine-gun speed and designs not only Chanel couture and ready-to-wear, but also his signature collection, Karl Lagerfeld, as well as Chloe and Fendi.

Not that he needs the money.

He’s heir to a condensed-milk fortune and only works, he says, to keep from getting bored.

His philosophy--”Not too much respect and a little humor are elements indispensable to the survival of a myth”--has kept Chanel in the forefront of fashion, increased its youth appeal and upheld its mystique. Lagerfeld plays loose and dangerous with the Chanel style, then steps back and watches everything fly out of the stores.

Southern California has been a hotbed of Chanel enthusiasts for years. While a Honolulu Chanel was the first of the 13 company-owned, free-standing American boutiques, the Beverly Hills Rodeo Drive store was on its heels in 1985.

The large Rodeo boutique installed the first fine jewelry department outside Paris, says its director, Catherine Kiek. It does a good evening-clothes business when the award season rolls around and conducts special fittings and events in its private rooftop salon decorated like Chanel’s Rue Cambon apartment, with beige suede sofas and lacquered Coromandel screens.

At the Costa Mesa boutique, which is the only mainland store in an enclosed mall, business “has proven to be vibrant,” says Cirkva of Chanel Inc. The boutique, which opened in 1990, has experienced double-digit increases in sales each year and surpasses the San Francisco store in sales volume. “When we originally planned the store, we had no idea that it would exceed San Francisco. We thought the hierarchy would be Beverly Hills, San Francisco, then South Coast Plaza,” Cirkva says.

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Roger Martin, director of the store, occasionally conducts a kind of “Chanel 101” class on the finer points of the line for small groups of the most devoted customers.

That’s no small feat considering the line is perhaps at its largest and most diverse right now with ready-to-wear and couture clothing, fragrance, cosmetics, accessories, watches, fine jewelry and shoes. With no official word on volume--it’s a privately owned company--outsiders have only guessed at its business figures.

Back in 1989, Forbes magazine profiled the owners, the Wertheimer family, and estimated that their Chanel empire was worth more than $1 billion.

Though sales volumes are secretive, what is clear is that in all its diversity, it has hit a wide range of customers.

Chanel’s customers, and the collection itself, can be separated into three distinct groups: traditionalists, fashion groupies and logo lovers. Except for rubbing elbows at the cosmetic counter, the three don’t appear to cross paths.

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Would Mademoiselle Chanel, who died in 1971, approve of what’s gone on with her beloved company?

Possibly.

After all, in her rebellious early days, she loved to shock by mixing real jewelry with fake, making women’s clothes out of men’s underwear fabrics and having a tan and a bob when pale skin and long hair were the rage. Fashion customers might be only following her lead when they snap up scandalously trendy pieces.

Chanel loved simple, timeless clothes, so those who buy the safe and traditional things are also paying homage to her spirit.

She put her CC logo on the No. 5 perfume bottle as early as 1921 and across buttons around 1955, so the label-laden are following another of her leads.

Instead of voicing disapproval, she might, in fact, be pretty pleased.

RUNWAY

The female rap group Salt-N-Pepa performed at this year’s Grammy show wearing Chanel’s scandalous miniskirts unzipped from the hem almost to the waist to create a slit, revealing sequined panties. The same skirts, made longer and tastefully zipped closed to within an inch of their hems, sold like hot cakes to women twice as old as the rap divas.

Uma Thurman in “Pulp Fiction,” Sandra Bernhard and Madonna were some of the first to wear Chanel’s Vamp, a red fingernail polish so dark it’s almost black.

Those who snap up shocking items right off the runway may be in the minority, but they’re the ones who keep the line on the lips of the fashion cognoscenti. The clothes are racy, inspired by everything from street fashion to “lipstick lesbians,” and all of it may be absolutely out by next season.

But it’s the stuff of fashion magazine covers, and that’s what this customer craves.

For these shoppers this season, there are cheek-baring cashmere hot pants, black leather jackets, completely see-through lace skirts, sheer dresses, fuchsia tweed dresses with oversized jackets, black jersey handbags and two-tone Oxfords.

LOGO

In Saks Fifth Avenue, which inherited the Chanel in-store boutique after I. Magnin closed, an unwitting accessories salesperson spills the truth: With legions of customers, it’s the logo merchandise that sells like mad.

“I can’t sell anything that doesn’t have a logo,” she confesses. “At least eight out of 10 pairs of earrings I sell have logos.”

What’s the appeal?

“It’s Chanel,” she says.

Apparently, that’s enough of an explanation.

“Chanel,” “Coco Chanel” or “CC” shouting out in bold letters across an earring, belt or handbag are an external proof-of-purchase seal.

To this customer, the prestige name is far more important than the accessories themselves. On several recent days, those buying logo items were tourists from Asia, Mexico and South America.

“No name, no buy. I like the logo clothes only,” declares Bobby Trinh, one of the few men who attends Chanel trunk shows to buy things for himself. At a recent Saks show, he was decked out in Chanel logo suspenders and carried a logo tote bag. The logo validates, says the Los Angeles resident.

“It’s the most portable form of wealth. It shows you to be a good worker. It shows you’re employed,” he says.

Trinh supports his high-ticket fashion habit by calling his parents in Vietnam to send him money. His occupation, he says, is “socialite.”

TRADITIONAL

Barbara Davis, wife of billionaire Marvin Davis, can wear anything she pleases because she can afford it. So when she shows up at a charity event wearing an elegant pastel pink Chanel suit, you know the Ladies Who Lunch in the vicinity take notes.

At the late I. Magnin stores, a bastion of Blue Ribbon society women, Chanel was the top line in the store.

Sally Field wore a black and white strapless Chanel evening gown, very non-Mama Gump, to this year’s Academy Awards.

Upcoming: Rene Russo goes classic in a few Chanel numbers in “Get Shorty,” opening this fall.

These women are wearing clothes one thinks of as Chanel: the polite cardigan knit suit with piping around the edges and chains weighing down the inside of the hems so they hang just right; the camellia pins; the low-key evening gowns; the spectator pumps, and the quilted handbags with leather-laced gold chain handles.

The status message is telegraphed to those-in-the-know by signature touches, never by a visible logo or label.

“I want Chanel without being obvious,” says Barbara Davis. “I like the classic beauty and simplicity that started with Chanel herself. She underdressed rather than overdressed. She’s a legend of good taste.”

While the price of a suit is equal to that of a small used car, it will probably be of service longer. A Chanel suit can last a lifetime because the timeless silhouette doesn’t vary dramatically from year to year.

The hemlines change--they go south for fall--and there are now dresses in the collection, but otherwise a Chanel is a Chanel is a Chanel. The workmanship is always flawless, and up close, even the fashion unconscious can see these are spectacularly gorgeous clothes.

In this season, which has been touted by designers in general as a time for conservative and real clothes, Chanel hits the mark dead center with its uncluttered classics and Republican restraint.

“I have taken things far enough at Chanel,” explains Lagerfeld.