Any information on 2015 price increase?
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I'm not sure where people heard that US was having a price increase on belts today. I went into the store today and asked about it and my SA told me that what was going to increase, all increased in February. The belt for 32mm is the same price today at NYC Hermes.
Great article in the WSJ today about closing in on the tipping point of luxury prices.
An interesting takeaway is that all of the "growth" over the last several years has come from price increases, not actual growth. Were it not for the increases, most luxury houses would have seen a decline.
While the article states that Hermes and Chanel are an exception, and still showing strong demand at current prices, I think many of us have already remarked that the slowdown is hitting H as well, it just hasn't shown up in the books yet. Perhaps the luxury analysts should check with TPF before finalizing their forecasts.
Fewer shoppers appear willing to go along now. Louise Singlehurst, an analyst with Morgan Stanley, estimates that price increases accounted for 220% of the sales growth for luxury leather goods and accessories last year, meaning that without the higher prices sales would have declined. By comparison, she estimates that price increases accounted for 18.5% of apparel sales and 42% of sales for items like jewelry and watches in 2014.
Weve reached a tipping point where the price increases are not sustainable, Ms. Singlehurst said.
http://www.wsj.com/articles/the-sky...bag-prices-1425503512?mod=WSJ_hp_EditorsPicks
An interesting takeaway is that all of the "growth" over the last several years has come from price increases, not actual growth. Were it not for the increases, most luxury houses would have seen a decline.
While the article states that Hermes and Chanel are an exception, and still showing strong demand at current prices, I think many of us have already remarked that the slowdown is hitting H as well, it just hasn't shown up in the books yet. Perhaps the luxury analysts should check with TPF before finalizing their forecasts.
Fewer shoppers appear willing to go along now. Louise Singlehurst, an analyst with Morgan Stanley, estimates that price increases accounted for 220% of the sales growth for luxury leather goods and accessories last year, meaning that without the higher prices sales would have declined. By comparison, she estimates that price increases accounted for 18.5% of apparel sales and 42% of sales for items like jewelry and watches in 2014.
Weve reached a tipping point where the price increases are not sustainable, Ms. Singlehurst said.
http://www.wsj.com/articles/the-sky...bag-prices-1425503512?mod=WSJ_hp_EditorsPicks
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Oh yes!!
Actually given that this site (and in particular, this section) probably has collectively more Hermes end-users than any other place on the Internet, I do think if an analyst wants to see if there are Hermes consumer or buying trends emerging, this is a good place to check out.
Damn right that we have reached a tipping point where price increases are not sustainable. Increasing prices year after year as a strategy for sales growth is not a sustainable long term strategy for a luxury brand company. While there will always be new customers who will flock to the brand, loyal customers who have been with the brand for years will at some point say "enough is enough". Increase the prices high enough (coupled with inconsistent customer service) and those customers will invariably find alternate ways to dispose of their discretionary income.
ETA: this article goes hand in hand with another one published in a different thread and I believe it was Leah who commented on how disappearing Russian and Chinese markets have impacted the luxury goods sector. So not only does year after year price increases not make sense as a long term strategy, it doubly does not make sense at a time when the two markets on which H is relying to sustain profits pull back sharply from consumer spending.
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Thanks, Monceau. Another fan of your post!
"This year" was going to be my first for purchasing bags from the boutique, rather than via the resale market. But that was before the increasewhich exceeded my ability to justify. Tant pis (thankfully, I've always been happy on the preloved/vintage market). This year, my plans include only one SA in one department (not scarves, not bags)so yes, they'll be seeing much less of my money at the boutiques this year. I'd say I'd rather buy at the Euro price and have it brought inbut the truth is, there's something distasteful going on that's affecting my desire for even H.
Great article Monceau - thanks for sharing!!!
Slightly off topic question about SO's (or maybe not since this article does talk about how the price increases just aren't sustainable) , did I read somewhere that SO's are increasing in price (by a LOT). Is that a rumor or is it true? Not that I've been offered the opportunity to place one but I'm curious.
Slightly off topic question about SO's (or maybe not since this article does talk about how the price increases just aren't sustainable) , did I read somewhere that SO's are increasing in price (by a LOT). Is that a rumor or is it true? Not that I've been offered the opportunity to place one but I'm curious.
Thanks for the article, Monceau. Very interesting. I can't say I like the solution of manufacturing tiny bags at a lower price point, but at least it shows that brands are getting the message.
Arabesques, your comment about something distasteful going on piqued my curiosity. What is it you find distasteful?
I myself have been tracking the prices in the EU compared to the US and with the drop in the Euro to the USD find myself not wanting to pay US prices. I'm thinking a trip to Paris might be fun...
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