French fashion house Chanel is pushing up the cost of luxury again.
At the end of 2019, a classic Chanel quilted calfskin flap bag with a gold-tone metal chain could be picked up for £4,720 at the French luxury brand’s boutique in London’s Bond Street. Today, that looks like a veritable bargain as the same bag now costs £6,930.
After raising prices by roughly 20 per cent over the past 18 months, Chanel has this week rolled out another round of increases in several countries as the luxury house levels prices across the globe.
Prices on core Chanel handbags and accessories and seasonal ready-to-wear will rise 6 per cent in the euro zone, 5 per cent in the UK, 5 per cent in South Korea, 8 per cent in Japan and 2 per cent in Hong Kong. No changes are being introduced in China and the US.
In contrast to increases in the previous 18 months, the latest changes are designed to "harmonise" pricing across markets, Bruno Pavlovsky, Chanel's president of fashion, told the Financial Times. "Because of the evolution of the exchange rate, the gap between prices in Europe and prices in Asia was becoming too big."
Positioning the brand
Jefferies analyst Flavio Cereda-Parini said the changes at Chanel were less about rising costs and more about positioning the brand in the same price category as rival Hermes and above Louis Vuitton and Dior.
Louis Vuitton raised prices 7 per cent late last month after jumps of 10 per cent in 2021 and 4 per cent in 2020. Hermès lifted prices 3.5 per cent last year compared with 1.5 per cent previously.
In tandem with the new pricing structure, Chanel announced that it was donating €2 million to organisations that support refugees fleeing Ukraine. Like other businesses in the luxury sector, it has been criticised for continuing to do business in Russia despite the conflict.
Chanel closed its Russian boutiques on Monday and Tuesday but reopened them for some clients on Wednesday. – Copyright The Financial Times Limited 2022
