INTERNATIONAL - French luxury house Chanel has increased prices for a second time this year, it said on Friday, as high-end brands seek to protect margins from the fallout of the coronavirus pandemic.
In a statement responding to a Reuters query, Chanel said the latest price increases were “the consequence of recent significant exchange rate fluctuations between the euro and certain local currencies,” without giving further details.
“These adjustments are made in all the countries where it is necessary and are the guarantee that Chanel items are sold at equivalent price levels throughout the world,” it said, adding this was particularly important at a time when international travel is very limited.
Chanel in May hiked prices of handbags and other small leather goods worldwide by between 5 percent and 17 percent.
Flavio Cereda, an analyst at Jefferies, said that had been followed by another increase of around 5% in October, notably in China, Hong Kong, Japan, South Korea and Britain. He expected other luxury brands to follow suit to compensate for the pandemic’s hit to 2020 margins.
LVMH’s star brands Louis Vuitton and Dior, Kering’s Gucci, Prada and Ferragamo among others have also increased prices this year.
Brands say they have reduced the gap between their prices in Asia and the rest of the world, although analysts estimate the same item often costs as much as 30 percent more in the key Chinese market than it does in Europe.
REUTERS