According to a Reuters report, Chanel and Louis Vuitton are raising the price of bags and leather goods to recoup losses incurred due to the lockdown from Covid-19 and the closure of stores.
Since the virus hit the key regions of luxury retail in Asia, in fact, sales have plummeted by 35%, pulling the handbrake on a more or less continuous growth process that had gone on undisturbed for the past decade. Chanel specifically announced that it would raise the prices of accessories between 5% and 17% due to the increase in the cost of raw materials caused by the pandemic. While in the case of Louis Vuitton, an item like the classic Neverfull MM Monogram bag had a 14% price increase compared to last October. And, in the case of the LVMH Group, Tiffany also raised its prices by 10% in South Korea “to reflect among other things, currency fluctuations and business input costs,” the brand told Reuters.
The situation of the big luxury brands is at this difficult. On the one hand they have to dispose of the large quantities of unsold goods, but on the other, they are reluctant to lower their prices and apply discounts to keep the exclusivity of their products intact. The trick seems to have worked because, as Reuters reports, as soon as the rumour of a price increase spread on social media, many Asian customers queued outside luxury boutiques to shop before the new measures were applied.