Are we being unfair to Chanel re prices?

[kiwanja]

Seriously, I had already drew a line, because the economy is in terrible shape, and it does not look optimistic to me for the next 5 - 10 years, and I'm not that rich can put away $10,000 on a bag which may only can sell in hand for $5,000 if I need to turn it into cash quickly.

I'm not encomiast I only can make decision on what I see and how I feel, and I'm too old to put $10,000 on one single bag and hoping in 50 years it will triple it's value, to the end, I guess I'm too poor and too old for buying a Chanel bag at $10,000 or over $6,000 at this point.

It's interesting to see how the next few years turn out.

I work as an investment professional so I follow the economy very closely: in the last 15 years (and my colleagues argues it's been this way since 1981 when rates peaked at 16%), the capital class have far outstripped the wage-earning class in terms of returns and economic gains. I call the capital class the people who make money with their money (ie investments, cash, stocks, etc.), and the wage class as the people who make money with labor. REAL wages in America have been flat for about that long (15 years).

It's created a lot of social unrest in society, and unfortunately there isn't much the government can do about it. The government only has very blunt instruments like the Fed, who can lower and raise interest rates and play with demand (but not supply). When they keep rates at near zero for over a decade, it made the rich richer. Think about 2022-21, when rates went negative and billionaires reached new heights of $200, $300 billion net worth. Previously unheard of numbers.

All that changed the last few months. Labor markets are strong, wage growth is strong, but the stock market and returns on capital are getting whacked by rate hikes. The WSJ calls it a richcession, not a recession. Personally, I think it is a good thing as we need society to work for everyone, not just the capital class, or else there are real consequences of social unrest. This is a recent 1.5 year phenomenon, so it's too early to call anything yet. But if it continues, I don't think it spells good news for these luxury brands.

When capital class get richer, ie someone goes from $1mm to $3mm of net worth, they buy more handbags and luxury, unnecessary goods. When wages go from $15 per hour to $18 per hour, that's probably a trigger to upgrade to better food sources, better housing, etc.

That's just the US, though. Asia is a huge market for these brands. China's economy is in the can / not doing well still, but there are emerging economies with elevating middle class. I wouldn't be surprised if growth in demand for these luxury goods taper off - there may still be growth, but not in the way it was the last decade. In which case, they may still be able to maintain these prices and even future increases, but they won't be seeing 5 people fighting for a $10k bag anymore, maybe it's just 2 or it's just 1 person.

 

[af068]

I am not very in tune with everything happening at Chanel but did hear noise about the most recent price increase. It proves that they are running a business like a business, maximizing profits for shareholders. Is it unfair? Not exactly because they answer to shareholders.

For the ones saying the prices right now take it away from being an "investment", IMHO, I dont think we can consider luxury bags as investments. There are actual investment vehicles that do this (stocks, t-bills, bonds, etc.). It just happened that Chanel bags more or less retain their value. Do you think about reselling your car when you purchase it? What about your primary residence, do you think about selling it before you even buy it? I think treating luxury bags as an investment is a marketing scheme from resale market that encourages us to buy more...

THIS!! I completely agree.

Please don’t ever buy a luxury bag with the mindset that it’s an investment that should accumulate in time. Invest in other things - stocks, real estate, etc. A luxury bag remains a luxury bag and should be appreciated as such. It will never replace the stock market or a home. I’ve always seen the resale value as a plus in case I ever get bored of the bag - rarely the case, but at least I can recuperate what I can to most likely get a different bag! But resale value should never be the main consideration.

I really don’t understand why anyone would make this one of their main priorities? I can understand that if the bag is very expensive, that it may be reassuring knowing that the money isn’t completely lost. But luxury, at the end of the day, is conspicuous consumption not a 401(k).

 

[Liberté]

People forget that Chanel can always make cheaper options to the classic bags that are trendier and perhaps have even better profit margins. The items with the biggest increaes are so iconic and desirable that there's a risk of overexposure and 'Michael Kors' effect for the core Chanel clients if it hasn't happened already. That should be a priority as these clients buy a lot more of everything.

If chanel the brand as a whole wasn't seen as exclusive enough, they should've exited fragrance and cosmetics, segments where the prices have gone up much less.

I don't think they want 'only certain people' to buy Chanel , but they want it to seem that way so that people can feel more special when they buy let's say a classic bag. That's really the whole business model.

I'm not sure how this works in the Chanel world, but LVMH can just keep clients coming back to other brands that are priced out of LV or Dior. Courreges is one such brand that is really becoming more popular recently. So there shouldn't be much of a downside.

 

[jcantu]

$250?! I wonder if we could ask for a price adjustment?

View attachment 5731648

I remember looking this information up bc I always put on The Hills when I am cleaning my house or doing stuff that needs background noise and noticed that around season 2 or 3 when the show really took off and the girls were making $$$ they all were rocking a lot of Chanel bags. So I decided to see how the prices have changed since then and I was shocked.

 

[Nathaniele]

People forget that Chanel can always make cheaper options to the classic bags that are trendier and perhaps have even better profit margins.

Let’s not forget that even classic flap takes a lot of machine work (as featured on their YouTube channel for instance ), therefore it might not be as expensive either.

I don't think they want 'only certain people' to buy Chanel , but they want it to seem that way so that people can feel more special when they buy let's say a classic bag.

IMO it’s hard to see the value in certain items if you don’t belong to a certain tax bracket. A lot of people may have the money to buy say Chanel hand cream, but how many of them would find it a solid purchase for what it is even though there’re cheap options doing the job just as well. Same with bags, sometimes I feel that people who buy them subconsciously don’t see the value behind them, so they always on high alert about scratching and other damage for not to jeopardize the resale value. Should one really spend that kind of money on an object if keeping it really stands out of their general habits? It would actually stand out for a lot of people with lower income.

 

[archygirl2]

$250?! I wonder if we could ask for a price adjustment?

View attachment 5731648

It would be roughly $2,790.76 in today's money.

 

[mltf83]

I am one of those who have been priced out from Chanel and I am likely the clientele they want to drop anyway
But I am not surprised at the price increase at all .. .

- the classic flap price on the second hand market where I am is higher than RRP. You know when that happens the brand is going to be sour about it because why should they let a reseller earn a cut? why not sell fewer bags and let their customers buy from boutique and get the full vibes from it? They have been trying to cut out resellers for awhile now with bag quotas and etc and I believe this is also part of it. This also tells them that they havent reached the pain point yet and people will still buy.

- sad as it is to say, they likely dont care about those of us who save to buy one chanel flap our whole entire life. Not every brand has to care about every corner of the luxury market, if you think they are expensive, then they likely dont want you in their store anyway. I think this is obvious from how their SA's treat us in the boutique ...

- The comparison with Hermes that I see everywhere is ridiculous. Hermes doesnt have to raise prices - they can just tweak the " game " .. and speaking of, I personally think the Hermes game is absurd and refuse to buy from them. At the end of the day an Hermes bag costs double or more of what the bag price is, and you have no guarantee you will get the bag you want or like, there is no guarantee of even getting A bag even after spending thousands because "everyone's journey is different" .. excuse me.. I don't have that much money to burn.

- again on Hermes, people saying that they rather go buy an Hermes now rather than Chanel - Hermes doesn't look anything like Chanel! ... Don't people buy bags because they like how it looks? I would understand more if people said they would rather buy a loulou from YSL than a classic flap because it is kind of a comparable bag in terms of looks and structure.

 

[papertiger]

$250?! I wonder if we could ask for a price adjustment?

View attachment 5731648

In the spirit of this thread. All bag prices across brands are through the roof. RTW too.

The above is an often quoted price-index. These make good headlines but we have to put everything in context. Huge leap but not out of place in luxury (wanna see fine art prices, sizeable natural diamonds, natural pearls?)

This is a CF/Reissue obsession: The Chanel CF didn't exist as we know it in 1955, that was the 're-issue' 2.55. It was a flap bag (mademoiselle lock) with an added chain. Like should be with like and without the CF, the Re-issue may not be selling either. I have a lamb Chanel bag from 1971 (not CF or reissue). If I sold it I may get my grandmother's money back (although to me it's priceless). On the preloved market there are plenty of non-CF/Reissues for bargain prices (against new prices). Without the 'return' on their 'investment' people wouldn't be interested in buying a Chanel CF/Reissue.

Other Chanel bag models and non-Chanel bags are available and not all of them are puffy-puff bags. Lots of non-CF Chanel bags through the years were amazing quality.

To put the rises in context. In 1975 an average house in the UK went for under £10K (approx.$12K). That was the year a woman could open her own bank account and apply for a Mortgage under her own name in England. In 2022, just under £300K (approx. $361K). But in London house prices went up from £12 702 in 1976 to on average £532, 666 in 2022. The percentage increase is much higher than the 'Chanel CF index'. It's so expensive to live in the capital, London jobs pay London weighting and key workers get extra help. Message is, we can't all live in London even if we'd like to live in the UK. It's not London doesn't want everyone, it's too many people want London.

Stop buying CF/Reissues and Chanel bag prices will fall.

 

[bklner2014]

$250?! I wonder if we could ask for a price adjustment?

View attachment 5731648

This is a very eye-catching chart, but was the 2017 price really $5900, as I recall paying around $4900 for my flap that year. Perhaps the price increase took place only after I purchased my bag, in which case I am happy that the timing was good for me! I agree that the current prices are shocking and I am totally priced out, which is fine too.

 

[FlairBear]

- again on Hermes, people saying that they rather go buy an Hermes now rather than Chanel - Hermes doesn't look anything like Chanel! ... Don't people buy bags because they like how it looks? I would understand more if people said they would rather buy a loulou from YSL than a classic flap because it is kind of a comparable bag in terms of looks and structure.

I think most of these people are all luxury handbag enthusiasts/collectors etc, with different bags, who appreciate different brands and different bags and they may want to add an Hermes to their collection or wardrobe. Different brands/bags serve different purposes. Hermes and Chanel are completely different, but you can still like both. Obviously, you need to like the aesthetics of the bag to want to buy one. Some people, including myself, are simply saying that if we were to spend x amount on a bag, in this instance $10k on a bag, we would rather spend it on an Hermes. For me personally, I already own Chanel bags, so to add one at this price doesn’t make sense to me, especially if I paid less before. I am pretty practical and somewhat good with my money. I don’t have endless amounts of money to burn. I have a certain amount I am willing to spend/allocate on luxury and a cap on what I am willing to spend on a luxury bag, so I must decide what I want to spend that money on. I will only pay the new Chanel prices if there a new color or style I really need to have in my collection. Saying that I am going to Hermes now doesn‘t mean I am not loyal to Chanel or that am I am naive to the Hermes game or that I am expecting to get a Hermes bag instead now. I do know that there is a presend. I have been liking both Chanel and Hermès for a few years now. Whether I am willing to play the game or pay a premium for Hermes with a reseller is a decision I will have to make. As for the YSL puffer you mentioned, I am not interested because I am trying to buy things I feel are timeless (not for investment purposes) but are timeless for my wardrobe. It is just a matter of choice, what you are willing to put that $10k towards, whether Chanel, Hermes, another brand, vacations, cars, education, home improvement, etc.

 

[jimmyshoogirl]

In the spirit of this thread. All bag prices across brands are through the roof. RTW too.

The above is an often quoted price-index. These make good headlines but we have to put everything in context. Huge leap but not out of place in luxury (wanna see fine art prices, sizeable natural diamonds, natural pearls?)

This is a CF/Reissue obsession: The Chanel CF didn't exist as we know it in 1955, that was the 're-issue' 2.55. It was a flap bag (mademoiselle lock) with an added chain. Like should be with like and without the CF, the Re-issue may not be selling either. I have a lamb Chanel bag from 1971 (not CF or reissue). If I sold it I may get my grandmother's money back (although to me it's priceless). On the preloved market there are plenty of non-CF/Reissues for bargain prices (against new prices). Without the 'return' on their 'investment' people wouldn't be interested in buying a Chanel CF/Reissue.

Other Chanel bag models and non-Chanel bags are available and not all of them are puffy-puff bags. Lots of non-CF Chanel bags through the years were amazing quality.

To put the rises in context. In 1975 an average house in the UK went for under £10K (approx.$12K). That was the year a woman could open her own bank account and apply for a Mortgage under her own name in England. In 2022, just under £300K (approx. $361K). But in London house prices went up from £12 702 in 1976 to on average £532, 666 in 2022. The percentage increase is much higher than the 'Chanel CF index'. It's so expensive to live in the capital, London jobs pay London weighting and key workers get extra help. Message is, we can't all live in London even if we'd like to live in the UK. It's not London doesn't want everyone, it's too many people want London.

Stop buying CF/Reissues and Chanel bag prices will fall.

Thank you so much for saying what I didn’t feel like typing!

 

[daisygrl]

In the spirit of this thread. All bag prices across brands are through the roof. RTW too.

The above is an often quoted price-index. These make good headlines but we have to put everything in context. Huge leap but not out of place in luxury (wanna see fine art prices, sizeable natural diamonds, natural pearls?)

This is a CF/Reissue obsession: The Chanel CF didn't exist as we know it in 1955, that was the 're-issue' 2.55. It was a flap bag (mademoiselle lock) with an added chain. Like should be with like and without the CF, the Re-issue may not be selling either. I have a lamb Chanel bag from 1971 (not CF or reissue). If I sold it I may get my grandmother's money back (although to me it's priceless). On the preloved market there are plenty of non-CF/Reissues for bargain prices (against new prices). Without the 'return' on their 'investment' people wouldn't be interested in buying a Chanel CF/Reissue.

Other Chanel bag models and non-Chanel bags are available and not all of them are puffy-puff bags. Lots of non-CF Chanel bags through the years were amazing quality.

To put the rises in context. In 1975 an average house in the UK went for under £10K (approx.$12K). That was the year a woman could open her own bank account and apply for a Mortgage under her own name in England. In 2022, just under £300K (approx. $361K). But in London house prices went up from £12 702 in 1976 to on average £532, 666 in 2022. The percentage increase is much higher than the 'Chanel CF index'. It's so expensive to live in the capital, London jobs pay London weighting and key workers get extra help. Message is, we can't all live in London even if we'd like to live in the UK. It's not London doesn't want everyone, it's too many people want London.

Stop buying CF/Reissues and Chanel bag prices will fall.

That is a good point that in 1955, there was no CC on the CF (considering Karl's CCs are the main selling point), and that can be partially responsible for the price difference. I posted the chart and the comment as a joke/a distraction, to lighten up the conversation as it was getting too serious. It was not supposed to be taken seriously. Prices are what they are. People are making it more serious than it is forgetting that they have a choice to buy Chanel or not.

 

[onlyk]

I am one of those who have been priced out from Chanel and I am likely the clientele they want to drop anyway
But I am not surprised at the price increase at all .. .

- the classic flap price on the second hand market where I am is higher than RRP. You know when that happens the brand is going to be sour about it because why should they let a reseller earn a cut? why not sell fewer bags and let their customers buy from boutique and get the full vibes from it? They have been trying to cut out resellers for awhile now with bag quotas and etc and I believe this is also part of it. This also tells them that they havent reached the pain point yet and people will still buy.

- sad as it is to say, they likely dont care about those of us who save to buy one chanel flap our whole entire life. Not every brand has to care about every corner of the luxury market, if you think they are expensive, then they likely dont want you in their store anyway. I think this is obvious from how their SA's treat us in the boutique ...

- The comparison with Hermes that I see everywhere is ridiculous. Hermes doesnt have to raise prices - they can just tweak the " game " .. and speaking of, I personally think the Hermes game is absurd and refuse to buy from them. At the end of the day an Hermes bag costs double or more of what the bag price is, and you have no guarantee you will get the bag you want or like, there is no guarantee of even getting A bag even after spending thousands because "everyone's journey is different" .. excuse me.. I don't have that much money to burn.

- again on Hermes, people saying that they rather go buy an Hermes now rather than Chanel - Hermes doesn't look anything like Chanel! ... Don't people buy bags because they like how it looks? I would understand more if people said they would rather buy a loulou from YSL than a classic flap because it is kind of a comparable bag in terms of looks and structure.

Chanel price increase helped resellers more not less.

regarding Hermes, I had bought two Hermes bags of the color my choice from boutique without the need to buy anything else, I even wanted to buy some men’s clothings thinking to “help“ SA, but they didn’t push the sale at all, for that, Hermes has given me a good experience so far.

The Hermes bags I bought actually suit the occasions I need them for very well, more than Chanel bags or other designer bags would in those occasions.

 

[baghabitz34]

This is a very eye-catching chart, but was the 2017 price really $5900, as I recall paying around $4900 for my flap that year. Perhaps the price increase took place only after I purchased my bag, in which case I am happy that the timing was good for me! I agree that the current prices are shocking and I am totally priced out, which is fine too.

Chanel Jumbo was $5500 in 2017. In November of 2017 (approximately), price went up to $5900. I remember because I was looking to add one before I turned 40.

 

[Lola24]

I am one of those who have been priced out from Chanel and I am likely the clientele they want to drop anyway
But I am not surprised at the price increase at all .. .

- the classic flap price on the second hand market where I am is higher than RRP. You know when that happens the brand is going to be sour about it because why should they let a reseller earn a cut? why not sell fewer bags and let their customers buy from boutique and get the full vibes from it? They have been trying to cut out resellers for awhile now with bag quotas and etc and I believe this is also part of it. This also tells them that they havent reached the pain point yet and people will still buy.

- sad as it is to say, they likely dont care about those of us who save to buy one chanel flap our whole entire life. Not every brand has to care about every corner of the luxury market, if you think they are expensive, then they likely dont want you in their store anyway. I think this is obvious from how their SA's treat us in the boutique ...

- The comparison with Hermes that I see everywhere is ridiculous. Hermes doesnt have to raise prices - they can just tweak the " game " .. and speaking of, I personally think the Hermes game is absurd and refuse to buy from them. At the end of the day an Hermes bag costs double or more of what the bag price is, and you have no guarantee you will get the bag you want or like, there is no guarantee of even getting A bag even after spending thousands because "everyone's journey is different" .. excuse me.. I don't have that much money to burn.

- again on Hermes, people saying that they rather go buy an Hermes now rather than Chanel - Hermes doesn't look anything like Chanel! ... Don't people buy bags because they like how it looks? I would understand more if people said they would rather buy a loulou from YSL than a classic flap because it is kind of a comparable bag in terms of looks and structure.

Funny to me, because they (Chanel) have made comments about the second hand market, they don't like it, (they clearly hate people making money off of their product second hand) so they set restrictions and make the prices so crazy that they lose the people who NEVER bought second hand to begin with!!! Let's face it, their bags are fairly mass produced, much of their leathers are not super expensive, they do NOT WANT people making a profit on their product so they will increase the price so much and reduce the ability to buy that they can still make the same profit while spending less on production and not having a saturation into the population (building some level of exclusivity). I bought my last WOC last month, I really like it and don't regret the purchase but it is most likely my LAST, I am not into re-sale market... I bought ONE super beat up 227 reissue about 8 years ago super cheap to restore for fun (not to turn around and sell), had it authenticated favorably although still question a screw issue but we have to remember seasonal bags can be a free for all in many respects and I had a favorable outcome from an authentication perspective (its funny how we have these specific guidelines as if the bag makers at Chanel never had to finish off a bag by hand with a slight variation and when someone gets that one variant OMG it has to be fake, but that's another discussion, recently just ran into a miss color matched hardware issue with seasonal color classics where the CC hardware was not a match to the chain, **** does happen lol) anyway it was a fun project bag and very cheap, and I use and adore it....buying anything at a premium pre owned is not for me, the other 25 plus Chanel handbags, SLG's, ( not to mention shoes accessories etc.) I own were bought in boutique I'm going to use and enjoy what I have.. Yes this is business, but they clearly have a little desire to keep faithful shoppers, way to snobby/greedy/expectant for me! I have no desire to spend 10K on a purse I already own multiple versions of that I paid way less for... it's too much too soon and social media, online applications, etc. probably hasn't helped. I actually know many millionaires who would laugh at spending 5k on a bag never mind over 10K... We just have better things to do in life at this point.