Chanel adjusts prices of its products for the second time in 2020. Capri Holdings is also retouching, gradually and with discretion, the price tags of footwear and accessories of Jimmy Choo and Michael Kors. Will other brands follow in its wake?
Chanel adjusts its prices
At Chanel, they explain that the price increase is “the consequence of recent and significant fluctuations in the exchange rate between the euro and some local currencies”. Therefore, the increase in production costs and raw materials have nothing to do with it, as mentioned last May by the brand itself to explain the first price increase.
In spring, the prices of handbags and other small leather goods rose worldwide between 5% and 17%. The maison’s top management points out to Reuters that the adjustment, the extent of which is not known yet, is useful for harmonising prices. The issue is particularly important when international travels are very limited. Flavio Cereda, analyst at Jefferies, explains to the agency that other luxury brands will follow Chanel’s example. According to Luca Solca, Bernstein’s analyst, who spoke on the South China Morning Post, the French maison risks driving away Western customers with frequent price increases.
In the States as well
Capri Holdings also “confessed” of raising prices. During the conference call on the results for the July-September period, the group revealed that it had “quietly” raised the price for Jimmy Choo and Michael Kors footwear and accessories. The gradual increase started before the pandemic and will continue, probably for up to a year. The reason given by the president and CEO John Idol (source: Footwear News) is that the products and the two brands are undervalued. For Versace, however, Capri does not foresee increases.