If you pay attention to prices of luxury goods and price increases, then a price increase across the luxury landscape in the last month or two wouldn’t be a surprise to you. We know that anything popular is likely to have a price increase because the demand is high and people will pay the price in order to have that desirable piece. However, we are in the midst of a global pandemic and the 4-25% increases in Europe are steep (U.S. price increases haven’t been released). And while Louis Vuitton, Tiffany, Bvlgari and a couple others do sell online (or at least some products), Chanel does not. So, unless you happen to have a great relationship with a SA already, getting your hands on product is not easy right now. Many Youtubers are in a tizzy over the increase, some are speaking about the unjust-ness in the increase and some others are delicately saying that Chanel is not made for the masses. Frankly, I agree.
Chanel is a predominant fashion house generally placed right below Hermes. Their Classic Flap is the quintessential classy handbag and I almost no woman would turn one away if it was offered to her. I don’t particularly want one, but if a jumbo flap did hit the resale market from prior to 2003, in the right color, at the right price, I would buy one. However, with the new increases, the resale market is already beginning to tweek their prices as well and I have no interest in spending nearly 5k on a handbag. Some of the complains from people surrounding the increases is the fact that those who have saved to purchase a bag will now have to save even more in order to afford it. But I think it is important to remember that Chanel is not designed for the masses. The company has no interest in creating a product that everyone can attain, they create exclusivity. I understand in today’s social climate we do not like this concept, we want everyone to be able to have the same things… yet we still spend billions on luxury products in an effort to make ourselves stand out.
In contrast, Louis Vuitton has also done a price increase. It doesn’t seem to be terrible – a couple hundred dollars at most on certain items. Their prices are live on their website and the prices on the resale market have absolutely gone up. I had been looking out for a Pochette Metis in the monogram empertine leather in pink which retailed about $2100, previously they were around $1900 on the preloved market. Now they are about $2420 retail and on the preloved market they have jumped up to $2300. Primarily the price increase applies to the popular monogram canvas items. It could be said that they are targeting their bottom tier customer base with this increase because it applies to their most accessible items but I think that might be harsh. Personally, I feel like th LV price increase accounts for inflation and simply the fact that they can charge a little more.
In contrast, the Chanel (admittedly EU prices) price increases are high. But like I said, creating a division between those who can and cannot afford Chanel is how they have built their business into what it is. It is desirable because it is not easily attainable. The resale market also stays high because they continue to increase their prices. Another factor influencing the price increases is Chanel’s intention to create a smaller gap between the price levels across countries. It has been common knowledge that the purchasing in France is generally the best option because prices tend to be lower. If this is the case (I don’t have first hand experience) then it would male sense that price increases in Europe would be high – seemingly they had space to make up between the prices there and other countries.
My final thought is about the timing of the changes. It may seem callous but I am guessing these changes were planned and this is just an unfortunate time. Chanel did make a statement saying the increase is in light of the increase in raw material costs… I can’t say whether this is true or not. But I do think its an interesting statement considering most manufacturers are not manufacturing the products… so they wouldn’t need to purchase raw materials. On the other side of this, when raw material costs decrease, Chanel will not implement a price decrease.
So, is the increase ideal? No. Is it fair? Not a relevnt question for a luxury business. Do I like it? No. Will I stop purchasing? Well, I was only purchasing handbags vintage anyways… but I will not be rushing out for one now!
What do you think about the increase? Share your comments below!
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