From Chanel to Celine, Price Hikes... Luxury Brands Raise Their Prices Amid COVID-19

On the 4th, customers are waiting to enter ahead of the opening time in front of the luxury goods hall at a department store in downtown Seoul. [Image source=Yonhap News]

[Asia Economy Reporter Seungjin Lee] Since COVID-19, price increases among overseas luxury brands have become more frequent. Following the recent price hike by the French luxury brand Chanel, Celine has also raised its prices.

According to the distribution industry on the 9th, Celine implemented an average 8% price increase on about 10 handbag items starting from the end of last month. The increased prices were reflected on the official website the day before, with the price hike ranging from 100,000 to 150,000 KRW per item.

This is the third price increase by Celine this year, following those in January and April. From January 1, Celine raised the prices of the 'Luggage Bag Nano' and 'Belt Bag Micro' products by about 100,000 KRW each. In April, the prices of popular 'Triomphe' line bags were increased, and in this latest price hike, products from that line were further raised.

Since COVID-19, the magnitude of price increases among luxury brands has grown larger, and the frequency of increases has also risen. Chanel, which raised prices on the 3rd, has increased prices four times this year alone. Including one price adjustment, Chanel has effectively raised prices five times within a year.

With the recent price increase, the Chanel Classic Bag Small rose by as much as 1,590,000 KRW overnight. Chanel also raised Classic Bag prices in November last year and July this year. In July, the small size bag price increased from 7,850,000 KRW to 8,930,000 KRW, a 13.8% rise, and the medium size bag price went from 8,640,000 KRW to 9,710,000 KRW, a 12.4% increase. Adding the recent hike, the Chanel Classic Bag line now all exceed 10 million KRW.

Chanel has implemented a total of seven price increases since COVID-19. Before COVID-19, price hikes occurred only once or twice a year, but after COVID-19, due to changes in production costs, raw materials, and exchange rate fluctuations, more frequent increases have been made.

This trend is similar for most other luxury brands. Major brands such as Louis Vuitton, Prada, Dior, Bvlgari, and Celine, which used to raise prices only once or twice a year, have increased the frequency to three to five times a year since COVID-19. Louis Vuitton and Prada have raised prices five times this year alone.

There is no specific explanation given for the reasons behind the price increases. The timing of the hikes is not notified in advance, causing consumer dissatisfaction, but the luxury brand stores remain crowded with customers. This is because consumers believe that buying in advance is the best way to avoid losses, as they do not know when prices will rise.

Frequent price increases have also led to the rise of 'resellers' who buy multiple products before the price hike and resell them for profit. In response, Chanel has limited the purchase quantity of bestsellers such as the 'Coco Handle' and 'Timeless Classic Flap Bag' to one per person per year starting from the 1st of last month.

This content was produced with the assistance of AI translation services.