It's actually very logical and well-documented in economics research that when a producer/supplier is trying to increase the price of a good, consumers care most about 1) the quantity of the increase and 2) the perceived fairness of the increase. People lump "quality" into that fairness bucket. And there are many examples of companies that have increased prices and justified it to their customers by saying "you will get an improved product." Actually it's a common strategy companies use to capture consumer surplus. In the past, airplanes use to sell one seat type at the same price for everyone -- economy seat. Then, they realized they can charge more for more legroom, or a lie-flat bed, for lounge access, etc. Now they even charge more to be in an exit row. A few industries (airlines, internet companies, hospitality, etc.) have perfected the art of capturing consumer surplus by offering buyers a slightly better product or experience for a slightly higher price.
Chanel's price increases are different from the inflationary, supply chain, market supply/demand type price increase examples because prices of bananas and houses can go up AND down. The price of homes went down 25% during the GFC. They'll go down again this year. Chanel has never decreased their prices to my knowledge.
I totally agree though that Chanel is very clearly trying to be a veblen good. Time will tell if it works or how far they can push it!