Chanel Defies Gravity – US Prices Go Up

chanelofficepriceincrease

Don’t say we didn’t warn you… Chanel US prices went up TODAY! It’s the first increase in three years on all classic CC and 2.55 iconic flap bags. Interestingly, the hike amount and percent depend upon which bag you buy.  Minis (although technically not classics) went up $200; mediums rose $500 and both jumbos and maxis spiked $400.

As previously discussed, PurseBop believes these US increases are part of Chanel’s successful global price harmonization scheme; prices around the world are virtually the same and the latest surge brings US prices up to Europe.  Right now, the biggest percentage increase by far is for medium flaps at over 10%, with others hovering roughly between 6.5% and 7%.

Price Increase

StyleOld US PriceNew US PriceDifferencePercent Increase
Chanel Mini Classic Flap$3,100$3,300$200+6.5%
Chanel Medium Classic Flap$4,900$5,400$500+10%
Chanel Jumbo Classic Flap$5,500$5,900$400+7%
Chanel Maxi Classic Flap$6,000$6,400$400+7%
StyleOld US PriceNew US PriceDifferencePercent Increase
Chanel Mini Classic Flap$3,100$3,300$200+6.5%
Chanel Medium Classic Flap$4,900$5,400$500+10%
Chanel Jumbo Classic Flap$5,500$5,900$400+7%
Chanel Maxi Classic Flap$6,000$6,400$400+7%

US vs. Europe Price Comparison

StyleOld US PriceNew US PriceCurrent Europe PriceUSD EquivalentOld US-Euro ComparisonNew US-Euro Comparison
Chanel Mini Classic Flap$3,100$3,300€2,610$3,079+ $21 in US+ $221 in US
Chanel Medium Classic Flap$4,900$5,400€4,480$5,285- $385 in US+ $115 in US
Chanel Jumbo Classic Flap$5,500$5,900€4,990$5,889- $389 in US+ $11 in US
Chanel Maxi Classic Flap$6,000$6,400€5,420$6,396- $396 in US+ $4 in US

*exchange rates calculated November 15, 2017

Why the variation in price hike depending upon bag?  It could be part of harmonization – for example if medium prices in the US have been lower than in Europe, a bigger jump would be needed to catch up. The flaw or inconsistency in this theory, however, is seen in the above chart: whereas before bags in the United States cost less, now US prices on minis and mediums are above those in Europe (at current currency valuations) while jumbos and maxis are virtually the same.  Could it be that US shoppers might want to take a trip abroad for a new bag?   Well, we’ll address that later . . .

Alternatively, Chanel may be following demand – the market for more popular bags may warrant a bigger increase.  Under this theory, Chanel calculates that buyers of Chanel medium flaps won’t flinch at an extra $500.

The price of both jumbos and maxis rose the exact same dollar amount, which of course means that the percentage hike on maxis is lower.  Perhaps Chanel is sensitive to the maxi tipping point – not letting it get too high to interfere with sales.

Again, we must ask the question: can you still save money buying Chanel abroad considering the recent price increase the US? Maybe some handbag math will make things clearer…

Handbag Math Example

Chanel Medium Classic Flap

chanelclassicmed

RegionChanel Medium Classic Flap
US$5,400
Europe€4,480
VAT Refund (approx. 13%)- €582
Cost after VAT€3,898
USD Equivalent$4,599
Duty Tax (approx. 8%)+ $368
Total Cost$4,967
US Price ($5,400) + Tax (approx. 10.25%)$5,954
Comparison Savings$987 (~17%)

*VAT refund, duty tax, and sales tax may vary by individual.  **Please note a savings may be found only if you travel to Europe to purchase and bring to the USA. 

US shoppers could save nearly $1000 by buying a Chanel medium flap in Europe – after factoring in taxes (VAT refund and US duty).  It’s important to keep in mind the above ONLY holds true when considering a US shopper buying in Europe and carrying home to use in the USA.

If we simply compare an American buying a Chanel classic in the United States ($5400) to a European buying the same in Europe ($5285), then prices are virtually the same: harmonized (or equal).  A bargain may be found only if you travel.

What do you think? Is a new Chanel in your budget? Would you consider a trip to Europe?