[Asia Economy Reporter Lee Seon-ae] The 'open run' (the act of rushing to buy items as soon as the store opens) of luxury brands continues this year as well. Despite social distancing measures due to the COVID-19 pandemic last year, luxury stores were bustling with customers. Chanel and Louis Vuitton led the open runs ahead of price hikes, and in front of their brand stores, long lines stretching from early morning for several days created a spectacular scene. Hermes has opened the price hike and open run season for luxury goods from the very beginning of the new year.
According to the luxury industry on the 6th, Hermes began raising prices on products sold in Korea starting from the 5th. However, Hermes plans to increase prices gradually by product category, as the arrival times of products in Korea vary. Overall, prices will rise by up to 10%. Price increases apply across all categories including clothing, bags, and accessories. Earlier, Hermes raised prices in Europe as of the 1st (local time), with increases ranging from 5% to 10%. Prices of products listed on the official Hermes Korea online store were all updated as of the 5th. The Picotin (22) bag is priced at 3.85 million KRW, and the Garden Party (36) bag increased by 100,000 KRW to 4.82 million KRW.
Rumors of Hermes price hikes at the beginning of January caused Hermes stores to be crowded from mid-December. By the end of December, products were sold out at all stores. Choi Ji-yeon (pseudonym) said, "I visited Hermes stores for year-end gifts, but after hearing the real price hike rumors, so many people flocked that the stores were completely empty," adding, "I went around several stores but couldn't buy a Twilly."
The Hermes open run continues even as the new year begins. As the luxury industry’s truth goes, "The luxury goods you buy today are the cheapest," products sell out quickly as soon as the price-increased items arrive. Hermes customer service is constantly receiving inquiries about product availability and price hike rates. Products are rapidly sold out on the official online store, with sales information being updated frequently. In luxury communities, information sharing about which stores have certain products is actively taking place. Jung So-mi (pseudonym) said, "I called all stores yesterday, but there was no stock of the Garden Party and Party Loafer lines, so I haven't been able to purchase yet," adding, "The seller said it might not be possible to buy in Seoul, but there is a rumor that they are available at Shinsegae Centum City Department Store in Busan, so I plan to check and visit there." Jung also added, "Hermes has been raising prices slightly every early year, so if you want a product, buying it this year is better than next year."
Louis Vuitton and Chanel, considered the 'Big 3' luxury brands along with Hermes, are also expected to raise prices in the first half of the year. There are rumors that Chanel will increase prices in May. Chanel raised prices twice last year, and Louis Vuitton did so three times. The LVMH group plans to raise prices this year not only for Louis Vuitton but also for Dior, Fendi, Givenchy, Bulgari, and others. Celine has already raised prices as of the 1st. The price hike rate is up to about 15%.
Despite luxury price increases, consumption shows no signs of slowing down. In fact, although many luxury brands raised prices last year, consumption reached record levels. Sales of luxury goods at Lotte Department Store and Shinsegae Department Store increased by 16% and 26%, respectively, from January to November last year compared to the same period the previous year.
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