A Casual Analysis of Price Increases in Lux Market - Would Love to Hear Others’ Thoughts!

[880]

As to answer your question, no I’m not boycotting any luxury brands for raising prices. I’m pausing luxury spending for the time being because it doesn’t feel quite right. But there are still a few pieces from Chanel, Hermes, and some other brands I’d like to add to my collection.

Now if a luxury brand came out against BLM or some other stance I oppose strongly, then I may need to take a stand with a boycott.

ITA with this above ^. It’s perfectly expressed.

Re some other stance, I do wish that fashion could perhaps produce less waste, but that will probably take years. I try to do my part by buying a mix of retail and preloved (I buy too much of both, but my mom, aunts, cousins and nieces are roughly my size and like all this stuff too) and trying not to buy so much throw away plastic packaging.

Chanel may sell tons of bags, but as another tpfer @TraceySH pointed out, they prefer the top 1% wealthy customer that buys RTW (be it CHinese, Russian, Saudi etc) and can spend for a wardrobe that includes 12K Jackets and other pieces every year. Part of the business model is also to gift or loan influencers or Popular entertainment industry hot items to promote. That exposure in turn provides the fantasy for the aspirational customer who buys lipstick or sunglasses. . .

no one is forcing any of us to spend discretionary income; we each have to decide whats worth it. JMO

 

[880]

If you haven't read Deluxe, I recommend you do.

+1000, ITA with all of your points! Loved your post

 

[inverved]

Luxury boutiques have caught on that consumers are willing to pay premiums in the pre-loved market to get their hands on the most coveted items like an Hermes Birkin or Kelly, Chanel classic flap/mini rectangular or hard to get LV items, so they raise the prices as a reflection of increased demand elsewhere. Not having to jump through hoops with snooty SAs or go on endless waitlists makes the route of pre-loved so much more convenient, especially during a time when we became bound to our homes.

 

[doni]

I don't see price increases having anything to do with the pandemic. Here are my thoughts:

1. A price increase is a normal thing that companies do, to compensate inflation. You have that in everything: tomatoes, toothbrushes, tablets. Yes, some things stay flat or decrease in price, but that's often due to productivity measures, relocations, dwindling demand or technological progress. In 2019 there was a 1.8% inflation in the USA. Now, if you increase something cheap, like pasta by 1.8% you might not even notice the price increase. For a 3000$ handbag that would be 54$ already. And often the inflation is higher than 1.8%.

That’s not the case. We are talking European companies that produce in Europe. In Europe inflation has been very low lately (in the US too, but a bit less). Last year it was barely 1%. A desirable rate of inflation is around 2%, below that, you are actually worrying about containing deflation, which has been the issue for Europe‘s monetary policy in the last years. Chanel has been increasing the price of its products by 10% or even 20%. Nothing whatosever to do with inflation.

 

[lara0112]

That’s not the case. We are talking European companies that produce in Europe. In Europe inflation has been very low lately (in the US too, but a bit less). Last year it was barely 1%. A desirable rate of inflation is around 2%, below that, you are actually worrying about containing deflation, which has been the issue for Europe‘s monetary policy in the last years. Chanel has been increasing the price of its products by 10% or even 20%. Nothing whatosever to do with inflation.

100% agree - they can afford to raise prices, and so they do. It appears, Chanel has just decided on another price increase of 5%, so..

 

[Gabs007]

100% agree - they can afford to raise prices, and so they do. It appears, Chanel has just decided on another price increase of 5%, so..

While it is annoying, I can totally understand them, I mean if each of us would have the chance to earn more, effectively getting a raise, we would jump at the chance. It is not like they are raising the prices of very essential goods, it is luxury. We all have changed jobs because another company offered to pay more, give better health insurance, stock options, pension funds, etc. The brands do it to increase profit, they are businesses. We can all live without the bag we don't really need but want, so we really do have a choice if we want to buy, or if we buy preloved or simply go for a more affordable brand.

 

[lara0112]

While it is annoying, I can totally understand them, I mean if each of us would have the chance to earn more, effectively getting a raise, we would jump at the chance. It is not like they are raising the prices of very essential goods, it is luxury. We all have changed jobs because another company offered to pay more, give better health insurance, stock options, pension funds, etc. The brands do it to increase profit, they are businesses. We can all live without the bag we don't really need but want, so we really do have a choice if we want to buy, or if we buy preloved or simply go for a more affordable brand.

oh definitely - I personally don't mind any of the price increases. For professional purposes, I find the topic interesting.

 

[classybags4ever]

Luxury boutiques have caught on that consumers are willing to pay premiums in the pre-loved market to get their hands on the most coveted items like an Hermes Birkin or Kelly, Chanel classic flap/mini rectangular or hard to get LV items, so they raise the prices as a reflection of increased demand elsewhere. Not having to jump through hoops with snooty SAs or go on endless waitlists makes the route of pre-loved so much more convenient, especially during a time when we became bound to our homes.

Is their goal to make pre-loved prices unattainable as well?

 

[RT1]

Is their goal to make pre-loved prices unattainable as well?

I'm afraid the resellers have caught onto the game and, as a result, jacked their prices up accordingly.
I'm currently searching for a certain bag and the resellers are asking double the retail price as it is mostly unavailable in the boutiques.
Insanity!

 

[Gabs007]

Hermes sells black 24/24’s with silver hardware. The Bridado also came in black.

Nope, only been offered it in the gold hardware and unless my SA lies and the website lies, the hardware is gold plated and the Bridado comes in very limited colours.... https://www.hermes.com/uk/en/product/bridado-backpack-H077763CK18/

 

[cheremushki]

I need to have a word with you, you need to look into Port Ellen, Laphroiag and such, your single malt taste buds need educating

RIP Macallan though. But Laphroiag forever

 

[tulipfield]

Chanel harmonized pricing a few years ago so there’s less incentive to shop overseas now, at least for that brand.

There are many good reasons to organize a boycott... “I need to be able to afford Chanel” does not feel like one of them, no offense! ^^; Myself, I already have what I want and limit new purchases mostly to shoes, which are still within the realm of reasonable pricing and haven’t given me issues quality-wise. It’s just a personal decision though, nothing worth starting a movement over.

 

[Gabs007]

Chanel harmonized pricing a few years ago so there’s less incentive to shop overseas now, at least for that brand.

There are many good reasons to organize a boycott... “I need to be able to afford Chanel” does not feel like one of them, no offense! ^^; Myself, I already have what I want and limit new purchases mostly to shoes, which are still within the realm of reasonable pricing and haven’t given me issues quality-wise. It’s just a personal decision though, nothing worth starting a movement over.

I'd say it's being an adult and living within your means, I am always totally floored how many people are willing to rack up their CC debt to have a bag they don't really need but want, it's luxury, for me having an excellent credit rating is actually much more important

 

[opensesame]

I personally thought the price increase has to do with the deflation of money. Money is worth slightly less, so to compensate, the price increases. I am not an expert, so if someone could explain it more clearly, I’d love to read about it.

 

[saligator]

I would argue that with COVID, the idea of what is meaningful has changed, and much to the worry of luxury brands, one of the top things that has changed is brand value. Whatever bag is worthless if you aren't well and can't go out, and brands are scrambling to try to keep revenue when they can see retail changing.

As for China, it may have a quicker recovery, and its inhabitants may also still have problems flying to other regions that are not open to buy "cheaper." Thus, for now, it's a captive market, and if the companies are capitalistic, they obstensibly *could* keep prices high to both benefit from making up revenue--AND--from keeping the status inflated as fewer can afford to buy the items.

This may or may not be their strategy, though, and this is where your argument is risky. We cannot say for certain that that is their game plan, we can only guess, and often assumptions can be wrong.

It also may be that the government of China taxes their imports so much, they have to have higher prices just to break even. We don't know what goes on with that, either.

For me, my luxury purchases have shifted to things I can still wear (jewelry) and away from things I no longer need (shoes, handbags, coats, dress and work clothing) for the time being. I'm ok with that. But it does seem wrong for people to pay more in one part of the world than another for the same things!