Yahoo Finance Chanel Price Hike Speculation Causes Online Frenzy in China
SHANGHAI — Is Chanel going to increase its prices again?
It appeared that items from Chanel’s Classic Flap and Classic Mini Square Flap Handbag Collection temporarily increased prices by 10 percent on the brand’s Hong Kong website, according to posts shared on the popular Chinese social commerce platform Xiaohongshu.
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A website glitch was the reason for the price hike, the brand explained, and prices returned to normal soon after.
According to screenshots viewed by WWD on the platform, the Black Classic Flap handbag rose almost 7,000 Hong Kong dollars, or $892, to 76,560 Hong Kong dollars, or $9,756, after the supposed hike.
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Customers rushed to confirm the news — one netizen quoted an anonymous salesperson saying that the price hike will likely happen this year, but the store hasn’t received a notice yet.
The French luxury house raised prices for its four core handbag styles and spring ready-to-wear collection this March. Prices were increased by 5 to 6 percent in Europe and 2 percent in Hong Kong, but prices in the U.S and China remain unchanged.
The rise follows three price increases in 2021 and the sixth since the start of the coronavirus pandemic in early 2020.
Bruno Pavlovsky, president of fashion and president of Chanel SAS, attributed the increase to a price harmonization policy that started in 2015, designed to guarantee that retail prices among different markets do not vary by more than 10 percent.
“That’s our choice as a brand. But what that means is that if we let prices slip between Europe, for example, and Asia, we know that we are directly or indirectly feeding a parallel market, which is not very satisfactory for our point of view with regard to our local customers,” Pavlovsky said during an interview with WWD in March.
With some signature styles priced twice as much as pre-pandemic levels, Chanel handbags are now considered a top investment product to combat inflation, according to a recent report published by the Credit Suisse Research Institute in collaboration with Deloitte.
Other luxury players have done the same since the pandemic, to protect margins and brand equity. LVMH Moët Hennessy Louis Vuitton-owned Louis Vuitton, Dior and Celine both raised their prices early this year. The French luxury conglomerate attributed price increases to changes in production costs, raw materials, transportation and inflation.
According to local news outlets in China, a sales associate at Shanghai’s Plaza 66 Dior boutique confirmed to the publication that the brand would reveal its second price adjustment in early July.
Related:
Luxury Brands Brace for Price Hikes, Entry-Level Items in China Rebound
Chanel Again Raises Prices of Classic Handbags
Chanel’s COVID-19-Era Price Hikes
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