[Luxury World] "Those Who Want to Buy, Buy"... Luxury Goods Prices Always Rise at the Start of the New Year

Rolex, Hermes, and Others Likely to Raise Prices Early in the New Year
Luxury Sales Growth Slows but Genuine Demand Remains Steady
"Buy Before the Increase"... Price Hike News Shared in Communities

Luxury brands such as Rolex and Herm?s are expected to raise their prices starting early in the new year. These luxury brands have traditionally increased product prices as an annual event at the beginning of the year, and it appears that this pattern will continue without exception next year.

Herm?s. Yonhap News

According to industry sources on the 29th, the domino effect of price hikes among luxury brands is expected to begin in January next year, starting with the Swiss luxury watch brand Rolex and the French luxury brand Herm?s. This year, Herm?s and Rolex simultaneously raised their prices starting January 1st, marking the first move in the price increase cycle. Although the exact dates for the price hikes have not been firmly set, it is anticipated that other brands will follow suit in adjusting their prices after these brands initiate their increases.

Rolex raised prices on popular products by about 8% earlier this year. However, the extent of next year’s price increases is expected to vary significantly by product. Typically, Rolex raises prices once at the beginning of the year, but due to the rise in gold prices, it also implemented a price increase of around 5% in June. Therefore, it is expected that the price hike will be determined differentially depending on the product.

Herm?s is predicted to raise prices across all product categories, including clothing, bags, and jewelry, by an average of about 10%. In particular, as gold prices continue to rise, the price increase for jewelry products is expected to be substantial. For example, the popular fashion ring 'Chandal' (rose gold) is currently sold at 3.37 million KRW, and applying a 10% increase would raise the price to about 3.7 million KRW. The 'Echarpe' ring (rose gold) would increase from 4.2 million KRW to the 4.6 million KRW range with a 10% price hike.

Dior and Chanel, which raised prices in January this year, are also expected to increase prices for their jewelry products. Both Dior and Chanel raised prices by an average of around 10% in January this year, and this year, price adjustments are expected to be around 5%. The anticipated timing for both brands is around the second week of January. Chanel and Dior previously implemented 'split increases (multiple-step increases)' by separately raising prices for bags, jewelry, and beauty products. It is predicted that price increases will proceed sequentially, starting with jewelry products, followed by bags and clothing.

The Italian luxury brand Loro Piana will also raise prices on January 4th next year. Loro Piana is expected to have the largest price increase among luxury brands. The average increase rate is 15%, with most categories such as clothing and bags seeing price hikes. Bag prices are expected to rise by about 10%, while clothing price increases could reach around 20%.

The jewelry brand Tiffany will also join the price hike trend early next year. Tiffany implemented price increases of about 5% in two phases this year, in January and October. Tiffany is expected to adjust prices around January 15th next year, applying a similar rate of increase mainly to gold products. The watch brand TAG Heuer is also confirmed to implement price adjustments in the 10% range. For example, the popular wedding watch Carrera Day-Date Automatic 41mm is currently priced at 4.5 million KRW, and a 10% increase would bring it close to 5 million KRW. Additionally, brands such as Boucheron and Breitling, which raised prices in January and February this year, are also expected to increase prices further.

Due to the economic downturn, domestic luxury consumption sentiment has weakened compared to before. According to Lotte Department Store, the sales growth rate of luxury brands, which was close to 35% in 2021, has dropped to the 5% range this year. However, luxury companies continue to raise prices citing reasons such as rising raw material costs and exchange rate increases. This is because those who purchase luxury goods continue to buy despite price increases. It is analyzed that luxury brands have judged that a strategy of selling multiple products to a small number of loyal customers is much more effective than selling to a large number of people.

In fact, various luxury brand price increase news is being shared on some internet communities. This is through price increase notification messages sent by brand representatives or sellers. Some community users are posting reviews stating that they purchased products before the prices went up.