Hi! Have you heard? The fashion community is up in arms this week because several luxury brands, including Louis Vuitton, Tiffany & Co, and Bulgari have recently enacted price increases on their products. Annoying? Definitely. In poor taste? Possibly. In their defense, (not that they really need defending – they’re multi-billion dollar companies), some of these companies repurposed their manufacturing and distribution facilities to make and ship essential goods like hand sanitizer, masks and gowns for hospitals and medical facilities or donated to COVID-19 relief organizations. Price increases are a common occurrence for luxury brands that aim to elevate their status and exclusivity while earning bigger profits. They can be frustrating, but if you want to buy luxury products, price increases are a necessary evil that you’ll have to cope with (or do your best to avoid by tracking them and buying early).
So if price increases are relatively standard, why is everyone losing their shit? Well, sis – let me tell you. Chanel, one of the longstanding epitomes of luxury, has increased the prices of its most popular bags by 4-25%. And they’ve done it in the shadiest way. A couple weeks ago, customers in the EU noticed that the prices of bags had disappeared from Chanel’s website. Now, as stores in Europe are beginning to reopen, the new prices have been revealed and they are astronomical. For example, the price of the square mini classic flap has increased 25% to €3,350 and the maxi flap, the largest of the classic flap line, now costs over €7,000. The U.S. price increases have also been announced and are less steep by percentage, but Chanel is already more expensive in the U.S., particularly when you account for the fact that EU prices already include taxes.
Chanel has justified the increases to their classic flap, reissue, wallet on chain, Gabrielle, 19 and boy bag styles in a rather vague statement by claiming the cost of materials has risen due to COVID, the increases only apply to the most iconic styles, and the brand regularly issues price increases (normally twice per year). Here’s why all of that is irrelevant:
- We are in the middle of a GLOBAL PANDEMIC. Nearly everyone is affected in some way or another. People have lost their jobs, people have died. It’s a tenuous time, and extremely insensitive of a multi-billion dollar company like Chanel to raise its prices with everything going on (they don’t need the extra profit).
- Chanel doesn’t sell online. So yes, the company has been without much revenue for the last two months, but it will recoup that with the anticipated “mad rush to shop” that Asia is already experiencing now that countries like China and South Korea are reopening. People still can’t travel, but if they haven’t lost their jobs, they can shop. The sad part for many people saving up for a classic Chanel Bag, which often takes years, is that the finish line has been moved without them having a chance to go to the store and buy their dream bag ahead of the anticipated increase.
- Even if the cost of materials has risen a bit, the quality won’t. Chanel bags are already so ridiculously overpriced for what they
are (essentially, mass produced luxury items with increasing quality issues and lackluster customer service), so the brand could financially handle an increase in production costs without increasing prices. Or, it could wait until the world and its economy starts to recover from this disaster to raise its prices more “sensitively.” Either way, customers will now pay a LOT more for a bag of equal, or even lesser, quality.
- Chanel is most likely trying to price out a demographic of its consumer base. Chanel may be striving to be more like Hermes, who can choose its customers and who will carry its bags because they are so popular, well made, and in extremely limited supply. Chanel wants luxury customers, and its target market of the top 1% who are not financially impacted by the pandemic and who could buy ten bags at once without looking at the price, will not be affected by this price increase (unless they care about the ethics of it). But like I mentioned above, Chanel doesn’t produce bags of the same handmade quality that Hermes does, so I doubt this price increase or the next one will get the brand to Hermes’ level unless it changes its production and supply patterns.
- Chanel bags have really good resale value because of the brand’s notorious price increases. So if you have a Chanel bag you’ve been thinking of selling, you’re in luck. For the rest of us, however who have been stalking second-hand websites for months
years, the prices of preloved gems are going to increase, too. Whether you’re buying new or preloved, you’ll now pay a lot more for the same product!
I know this entire issue is major first world problems. Raising luxury prices during a pandemic may be in poor taste, drawing a lot of attention from those who follow the fashion industry, but it’s incredibly minor and insignificant compared to everything else that’s going on. Now, if price gauging were happening with essential goods like toilet paper and hand sanitizer, that would be a real big issue. I don’t own a Chanel bag and don’t think I would ever buy one new due to insane prices and declining quality (I’ve had my heart set on owning a vintage small classic flap for years). I’ve just found the event both interesting and insensitive and wanted to share some of my thoughts! If you want to hear more in-depth discussions about the Chanel price increases, I recommend Sophie Shohet’s video, along with Chase Amie’s and the geek is chic’s for a couple different perspectives.
Stay safe and stay home!