Any information on 2015 price increase?

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#497
klynneann said:
This.

I am fully aware that all of the high end luxury brands have price increases every year. I think what bothers me so much with this year's increase is how much of a discrepancy in prices there is between different parts of the world. A difference in price due to a state or country's tax is one thing; this is different. I'm not angry about it. But I am disappointed and a little saddened.
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Prices in Asia has always been significantly higher than Europe and North America, minimally 30% more. In some countries, it is even greater than 40%, more so now as the Euro has depreciated. About 5-6 years ago, prices at my local stores also moved in annual increases of 8-15% for a few years and I'm curious to see what/where the sales numbers are today.
 
#498
stephc005 said:
I'm surprised how many people say they'll go to Europe to purchase a B/K/etc. because of the price discrepancy. Does everyone have a SA there? Lol. We all know it's hard to get a coveted bag without being a local or regular...how many people are willing to pay thousands to go to Europe and run the risk of not being offered anything? With H, it's always been a take it or leave it type of mentality. After the price increase, I bet people will still take whatever they're offered in fears of not being offered anything else in the near future.


I don't worry much about the price increase- I'll still buy if I'm offered something I love. I do hope my Paris SA pulls through for me and gets me something nice this summer, and I almost secretly hope my US SA's don't get those K's I've been waiting on, but I'll play it all by ear. I do know I don't really want a Toolbox anymore if it's going to cost nearly as much as a K or B though! And I sure hope housewares don't increase too much since I still need to buy more dishes!
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What thoughtful and intelligent arguments all around! I do believe that this point however is most simply stated; if offered, we WILL buy. I'm not going to pass on a B or K because of an increase or the reality that it's thousands less in Europe.
 
#499
Prices in Canada have traditionally been higher than in Europe and the US so I often bought H items during my travels and rarely went into our local store. In last few years, some of the items in Canada such as 90 silks, some SLGs, etc. did not experience any price increase so the gap in Canadian and US pricing began to close in some categories and I began to frequent our local H. It'd be interesting to see how we'll net out after the 2015 price increase takes affect. The US exchange has also gone up by about 12-13% just in the last 3 months. So between the rising exchange and the price increase, it'll likely be more economical to buy H at home, and may be in Europe.

I agree with Bostonjetset on the aspirational buyer. I think there are more of the middle or upper middle class where buying luxury items such as H is a treat but not always a priority. For some, it may be a sign of I've arrived or look at what I've accomplished. For some, it could mean accessibility for the first time of things that were previously out of reach. As with other luxury items, an H bag or accessory is never a necessity. It's a matter of wants not needs. Perhaps the price increase will quell the wants in some and fuel the wants in others. We won't know the impact of this price increase and continental price disparity for some time. May be it'll be a case study in an MBA class one day.
 
#500
I'm so glad that I subscribed to this thread. It's very informational!!
For sure I can confirm that bags are up at least by 10% coz I saw the new price tag for a bag today, It's actually 10.3% to be exact.
I think I considered myself to be an aspirational buyer but I'm afraid I might retire soon with this price increase situation. I do really appreciate and will continue to admire H craftsmanship and their timeless design.
 
#501
arabesques said:
This is closer to what was suggested by my SA at one of the stores. . . 10% was the bottom number.

I hesitate to add anything to the discussion about the increase—the truth is, most of the time, I prefer vintage anyway . . . older box, chamonix, and barenia are powerful seducers. While I hoped to acquire a couple of pretty bags from boutiques this year, it's okay if the price increases and USA/EU disparity discourage me.

I'll remain a customer, I'm sure, but I'm working with a couple of SAs to acquire some pieces I want before the awful moment arrives.
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Wow, this is looking to be a substantial increase.
I have a couple of orders in the pipeline, but after that, I'm not willing to be a buyer at this price...not on bags, at least.
There are just too many smart buys out there at the moment, and H isn't one of them.

I hope you find your items before the increase, dear! :smile1:

Bostonjetset said:
:goodpost:

I never considered the correlation between the real estate bubble and out of control retail price increases but it makes complete sense. Thanks for this post. I think you also hit the proverbial nail on the head, my dear Monceau!
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Aren't we all just wonks with style, dearest Bostonjetset! ;)
 
#502
ms piggy said:
Prices in Asia has always been significantly higher than Europe and North America, minimally 30% more. In some countries, it is even greater than 40%, more so now as the Euro has depreciated. About 5-6 years ago, prices at my local stores also moved in annual increases of 8-15% for a few years and I'm curious to see what/where the sales numbers are today.
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Wow. Shows you how much I know. :nogood:
 
#503
mistikat said:
I would question that Hermes is looking to or has ever looked to the middle class as a key customer segment for them. If you queried people, I would guess that very few would think $10,000 for a handbag is rational, much less a must have. Or $500 +/- for a scarf. I agree the amount of the increase feels like a slap in the face to many of their existing customers, no matter their financial means (no one enjoys paying a lot more for something, regardless of their personal finances) but I am betting that by the end of this year, their sales will be as robust, if not more so, than in previous years. Chanel and LV are not far behind them in terms of pricing or price increases. I doubt those brands will suffer much either.
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I agree, Mistikat! And if anyone is looking for some irony in all this, head on over to the price increase thread in the LV forum. People are so sick of it they're planning to jump ship ... to Hermes!
 
#504
MYH said:
I must admit I keep coming back to this thread because I'm enjoying the discussion. Here's my two cents.

From the corporation's perspective, I think they feel the need to "make-up" lost revenue from the decrease in the value of the Euro. So if the euro keeps dropping, the revenue needs to be made up somewhere. That's where the US comes in. Our price increase and the strength of the dollar helps fill the revenue gap. I've been part of many large companies that don't feel like currency fluctuations are any excuse to not show growth in their bottom line. Now, to further play this out, H may even shift inventory for their desired bags (like B's and K's) out of the Euro zone to the US for purchase, because why wouldn't they want to get a higher price for the same product? So we may find that scoring a B or K in Paris will become a lot harder and much easier in the US this year. But, this may all backfire on Hermes and the US customer may slow down purchases but guess what? prices are easy to change. Just get your employees to spend a day re-ticketing and reprograming the computers and voila, you can go back to your old price that's more acceptable to your customers. But I highly doubt this is going to happen!

Now, from my perspective, the reason I find the price hike in the US ridiculous is because our friends in the Euro Zone are paying thousands less for the exact same product! It's kind of like airplane seats. I get a bit miffed if I know the person in the seat next to me paid much less for the same seat. It's a matter of principle. I just don't like to get snookered. And it doesn't matter if you're upper class, middle class, or somewhere in between, almost everyone likes to get a good deal.
So personally, for me, I'm with Vigee. I will delay any large purchases for the trips I take to Europe. Smaller purchases like scarves or bracelets, will probably continue to be made in the US because the price difference is not so great. But this plan may backfire on us for my reasoning above....

Personally, I'm also surprised that H would crack the door wide open for arbitrage. This will only fuel the re-seller market further.
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Good point, but you have to remember .... that Hermes has to pay customs and tariffs on the bags that they import, around 8% !!!!! I do not think they would intentionally shift inventory-
Also certain store just get a larger supply of Bags ..... Especially Monaco!!!!
 
#505
Interesting direction for this thread.
A few observations/thoughts:
I have bought Hermes for 20 plus years, more sporadically in the beginning than now.

European products used to be cheaper in Europe - this always made sense to me since they are made there, don't need to be exported etc. Only in recent years, they weren't cheaper. Now, with the stronger Euro, items there are cheaper again. And cheaper is relative, I am referring to cheaper from a US customer standpoint who is being paid in dollars.

The price increases of Hermes items have been steeper in recent years (I attribute this to their growing popularity).

With the weaker Euro, it makes sense that Europe is gaining more exporting powers.

I don't think the middle class has grown globally.
 
#506
ms piggy said:
Prices in Asia has always been significantly higher than Europe and North America, minimally 30% more. In some countries, it is even greater than 40%, more so now as the Euro has depreciated. About 5-6 years ago, prices at my local stores also moved in annual increases of 8-15% for a few years and I'm curious to see what/where the sales numbers are today.
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Yea that is so true. This is exactly how we are feeling over here in Asia for many years. The new 2015 price for a B35 in Malaysia is RM43,000 roughly USD12,000. The demand for H is still on the rise and despite the crazy price increases, my local store is expanding. We always say with the prices over here, we can pay for B in Europe and a trip to Paris, but truth be told, if offered a coveted item, we'd grab it in a heartbeat. Purchasing an item from a H boutique at an increased price beats getting it from a reseller any day, IMHO.
 
#508
Monceau said:
Mindi B, I believe you are correct in your observation that "aspirational" is, in some instances, used in the pejorative, but I believe most of us are referring to the marketing phenomenon of moving up the consumer ladder to the highest rungs in the market, which is a positive development in the world, at least from an economic standpoint.
Old and New should not make a difference: There are plenty of "new money" consumers who are HNW and not aspirational (think Mark Zukerberg or the Kardashian clan) and there are plenty of "old money" consumers who are no longer HNW, or even aspirational.

There are HNW people who do not care about antiques (Kardashian) and those who do not care about luxury goods of any kind (I believe I read that Mr. Zukerberg drives a VW golf)

Likewise, there are the people in the middle who appreciate high end things, whether wine, or handbags, autos or antiques, and will purchase what they can when they can. This is the growing market, but it's growing much faster in certain sectors, like accessories and automobiles.

One of my points was that Hermes and other brands recognized the aspirational market and increased supply to meet demand. Their business strategy today is formed with the aspirational consumer in mind. As you said, the luxury sector must look to this consumer for growth - the consumer with new and growing resources. Settled markets do not provide growth opportunities.
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With increased supply/production and these now annual and substantial price increases, how does that impact the secondary market? Increased cash flow demands, sitting on inventory longer because consumers are able to buy them directly? Do you see pricing becoming more competitive on the secondary market?
 
#509
Did the U.S. go up today? I just checked H.com to see if I could find an increase on leather. I forgot last night to check prices, so I don't know. Silks and footwear look to be the same, but think those are going up later?

Edit: just did a quick compare against the prices people have posted to the 2014 price thread, looks like the increase hasn't taken effect online yet. Jypsieres and Evies look to be same price
 
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