According to a report made by Reuters, the French brands, Chanel and Louis Vuitton, decided to increase the prices of their bags and leather products, to recover from the slump in sales happened during the lockdown and the closure of their stores. The loss seems to be around 35%.
Chanel announced that they increased the prices of their accessories between 5-17% due to the now higher cost of the materials caused by the pandemic. Even if the value of the Chanel bags, such as the 2.55, increase over time, the brand still needs to fix their profits. Louis Vuitton declared that they raised their prices by 14% since last October, while Tiffany by 10% in South Korea. It’s a marketing strategy that some brands need to take into consideration if they want to recover any loss, while some brands might not want to apply to avoid a reaction by the consumers.
Everything seems more complicated if we think that the majority of luxury brands’ sales comes from Asian tourism, like China, where the prices of luxury products are usually higher than in Europe (even if in the past years that slightly changed because the tax reductions on import products). Due to the lockdown, brands can’t count on tourism anymore. In the meantime in Asia, hundreds of people queued outside of the most exclusive boutiques, to do some shopping before the new measures were applied, like what happened in China with Hermès. On April 11th the store opened again and made in just one day over 2.7 million dollars.