The luxury fashion brand has raised prices, and set purchasing limits in an effort to become a more exclusive and desirable brand.
Chanel has raised global prices on some of its classic handbags by almost two-thirds since the end of 2019.
A spokeswoman said the hikes are in response to unspecified exchange-rate fluctuations, changes in production costs and to ensure its handbags cost roughly the same around the world. But luxury-sector executives and analysts say the magnitude of the increases signals an aggressive corporate strategy: asserting control over one of the brand’s most popular products while taking aim at higher-end rivals.
Since November 2019, the price of Chanel’s small classic flap bag in the US has gone up by 60 percent to $8,200, according to data compiled by Jefferies Group analyst Kathryn Parker. The large version of the handbag known as the 2.55 now costs $9,500 in the US following Chanel’s latest price hike, the brand’s fourth in two years. It cost $7,400 in June, according to Parker.
Charles Gorra, chief executive officer of Rebag, which sells pre-owned luxury purses, says the push could be aimed at making Chanel’s products more exclusive, to gain ground on the most iconic handbags of all: the Birkin and Kelly bags by rival luxury house Hermès.
A medium-sized Chanel flag bag in France now costs €7,800 ($8,800), €100 less than a Birkin 30 in Togo calfskin by Hermès. Chanel is striving “to be part of the Hermès world and less of the Vuitton and Gucci world,” Gorra said. “They are trying to go upscale.”
Ubiquity Versus Exclusivity
In addition to making its products more expensive, Chanel is cracking down on the number of handbags customers can purchase at one time, though the limits don’t appear to be consistent.
Chanel could be hoping that this scarcity will make it “an even more desirable brand,” said Ines Ennaji, a business development manager at Paris-based Luxurynsight, which provides industry data. “By increasing desirability, they’ll have a reason to justify their price increases.”
For more information please visit www.businessoffashion.com