Covid-19 has nothing to do with the increase in prices, CHANEL assures. Instead, it does a little. The news that the luxury brand is preparing to retouch the Chinese price lists surprised everyone. Starting with the consumers of the People’s Republic, hurried to shop before the adjustments of price tags. But from the upper floors of CHANEL they want to point out that the move does not chase the Coronavirus pandemic. In the sense that it is not a useful shortcut to make cash after the (meager) months of lockdown. Instead, it serves to recognise the right value for the product when the supply chain is to be secured.
The price increase
So, as WWD summarises, CHANEL has planned a price increase of between +5 and +17%. The burst concerns a reduced range of bags and small leather goods, while it does not affect the seasonal models of leather goods, ready-to-wear and shoes, as well as perfumes and beauty products.
It starts shortly in China, we said, and will follow in the rest of the world, with gauges that take currency fluctuations into account. There is no intention to rely on consumers, CHANEL reiterates: it is its practice, WWD recalls, to recalculate prices twice a year to adapt them to market conditions and exchange rates, as well as to align them “with the constant increase in production and raw materials costs”.
There is a supply chain to protect
“The price of a bag reflects not only the sense of exclusivity, but also our values - claims CHANEL -. Buying one of our accessories means acquiring French expertise and design, our inexhaustible commitment to preserving skills and craftsmanship, combined with cutting-edge manufacturing and guaranteed origin of raw materials, such as leather and ornaments”. Although the French house does not go into detail about how the various factors influenced the choice, from the answers to WWD it is clear that the question of the value chain is a priority.
“In these challenging times for our suppliers and manufacturers – reads the article – it is essential for CHANEL to continue to support them in the best possible way. Know-how, which combines tradition and innovation, must be preserved. It is a constant effort. The price of the products is a recognition of this”.
The French maison is keen to remember that its commitment in the supply chain is direct: “Like any other luxury brand, CHANEL is making financial efforts to secure its supply of high quality leathers, investing in the value chain and acquiring suppliers – it concludes -. These investments are essential to guarantee the longevity of such an iconic product, at the quality levels appreciated by customers”.
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