Frequent Price Increases Compared to Pre-COVID
Louis Vuitton and Prada Raise Prices 5 Times
Chanel Likely to Increase Prices for the 4th Time
Inventory Disclosure Still Unavailable
Customers Line Up at Store Entrances from Early Morning
[Asia Economy Reporter Seungjin Lee] Since the spread of COVID-19 made overseas travel and duty-free shopping difficult, the arrogance of luxury brands has only increased. Following Bulgari's planned price hike in October, Chanel, which has already raised prices three times this year, is expected to implement another additional increase.
Bulgari's Fourth Price Increase This Year
According to industry sources on the 24th, Bulgari, considered one of the four major luxury jewelry brands along with Cartier and Tiffany & Co., will raise prices of jewelry items by 6% and watches by 3% next month. Since the brand focuses on accessories and watches, most of its products will see price increases.
Bulgari adjusted prices for all items in March and raised prices on some items again in June and July. This marks the fourth price increase this year alone. With this price hike, Bulgari's representative products such as the ‘B.Zero1 Necklace (Rose Gold)’ will be adjusted from 5.85 million KRW to 6.2 million KRW, and the ‘Serpenti Seduttori Watch (Rose Gold)’ from 36.3 million KRW to 37.4 million KRW.
Chanel, which has raised prices significantly in January, February, and July, is also rumored to be planning another price increase in September. Some consumers have received information from U.S. sellers that Chanel product prices in the U.S. will rise in November. Among Chanel products, wallets have not yet seen a price increase this year, so industry insiders suggest there is a possibility of price hikes for these items. Chanel has previously implemented domestic price increases around the same time as overseas price hikes.
"Price Increases Without Notice"... Resellers Join In
The frequency of price increases by luxury brands has become more common since COVID-19. Louis Vuitton and Prada have each raised prices five times this year alone. Other famous luxury brands such as Dior, Burberry, Cartier, and Celine have also increased prices one to three times. Most of these price hikes occurred less than a year after the previous increase, often without any prior notice. A luxury industry insider explained, "Even considering that price increases were limited to some items rather than the entire product range, the average frequency of price hikes has increased compared to before COVID-19."
Consumers' ‘open run’ (lining up before store opening) continues as well. This is due to brands not disclosing stock availability and the anxiety over unpredictable price increases. Some consumers start queuing at multiple department stores from early morning to get waiting numbers or even form groups with acquaintances to take turns. Additionally, with resellers aiming for profits joining in, in the case of Chanel, if consumers do not participate in open runs, it becomes nearly impossible to access the stores due to the overwhelming crowds.
Thanks to consumers' love for luxury goods, the domestic luxury market size continues to expand annually. According to market research firm Euromonitor, last year the domestic luxury market size was 14.9964 trillion KRW, about a 22% increase compared to 12.21 trillion KRW in 2015. The domestic luxury market is expected to exceed 15 trillion KRW this year.
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