Ferragamo did it too, therefore joining the number of luxury brands that have eventually raised prices. In fact, likewise, the Florentine fashion brand has raised its prices, for some products, by 5 to 7%. For the records, the company did not announce such increase, which they have applied in all of the markets: a spokesperson confirmed the information anyway.
Ferragamo did it too
Experts call it pricing power. In other words, it is the company’s policy to raise its own prices during some rather difficult economic periods. Businesses generally implement such strategy in order to augment profit margins and offset, at the same time, downturn in sales. Yet, not all companies may rely on such ability. Top luxury fashion brands can. As reported by Business of Fashion, while quoting an unknown source, Ferragamo’s decision aims at a specific goal. That is, “to soften the downturn in store sales alongside the increase in costs related to logistics and retail sale management, brought about by the pandemic”.
The sales trend
In 2020 first quarter, Ferragamo sales decreased by nearly one third. Likewise, the pandemic, caused by Covid-19 outbreak, is going to affect heavily the second quarter trend as well. The action taken by Ferragamo comes after the decision made by other luxury fashion brands: Louis Vuitton, Chanel, Gucci and Prada. Other brands, instead, have made an opposite decision as they have balanced selling prices. This kind of process caused prices to decrease in China: in so doing, they hope that selling volumes will increase in Beijing, which they consider a paramount market for revamping sales throughout 2020, which proves to be a most unfortunate year indeed.
Pictures taken from ferragamo.com
- Prada claim that production volumes are not at risk of decrease
- Gucci drastically cut wholesale: Italian multi brand stores from 110 to 38
- Gucci joins the group of brands increasing their prices