Business Fashion Section Editor
Luxury items are desired based on how accessible they are; the harder it is to get a luxury item then the more you want. Almost as if the brands were playing hard to get with its consumers. But when does inaccessible become too much?
Brands like Chanel and Louis Vuitton have raised the prices of their handbags since the pandemic has taken a toll in decreasing revenue for many fashion brands. In the spring Chanel had raised the prices of its handbags up to fifteen percent more, for example the Chanel Classic Medium Flap Bag went from $6,800 to $7,800, a one thousand dollar increase. To think that there was a time that the same bag was worth just over $2,000 and it has multiplied its worth many times. As for Louis Vuitton, there were recent increases of up to 33%, the highest increase being for its popular Pochette Accessoires.
Due to the pandemic, there was a $600 billion decline in the fashion industry, so these price increases from luxury brands are not a shock because they are trying to recuperate their losses. Part of the reason for the decline was also due to border closures, it limited the amount of travel between countries since prices vary. It is found that there is an increase in travel of tourists from China to European countries because luxury items cost almost 33% more in China than in Europe.
Increasing prices can be a risk, as it can upset loyal customers who do not want to pay a price increase for their favorite brands, but it can also help with the branding and image of these luxury brands. The harder it is for someone to get their hands on an authentic luxury bag, the more it will be desired, especially by those who have the means to purchase them. Just like Hermes has been able to keep that effect with its Birkin bag, because it is almost unattainable, it is desired by many.
It is expected that more price increases will be set in 2022 for the spring season, by then the increases might become just too much and will only be safe if resellers can keep up. As of now, bags like from Chanel have been able to keep up with the price increases because they can resell for at least the same price or more, because their value does go up as time passes. But it is possible its value will not stay put if retail prices keep going up.
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