Chanel Claims Price Hike is Due to Higher Costs, But is it Really?
With Chanel’s latest price hikes now officially in the books – or on the bags – the company went on the record about why. And guess what? It sounds exactly like what they said about 2020 price hikes. And, in our opinion, it doesn’t quite ring wholly accurate.
Regarding the November 3, 2021 increases, a Chanel spokesperson said:
“Like all major luxury brands, we regularly adjust our prices to take into account changes in our production costs and raw material prices, as well as exchange rate fluctuations… Price adjustments are made in such a way as to avoid excessive differences between regions.”
So, in simpler terms, Chanel claims it has become more expensive to produce the flap bags. Sixteen percent more expensive than last year??? And if that were so, don’t you wonder why other lux brands aren’t experiencing the same cost inflation. Hermès certainly isn’t.
Chanel is effectively claiming a double digit hike in costs two years in a row. As a reminder, in 2020 Chanel said the increases in prices for Classic, Gabrielle, Boy, and Chanel 19 bags were “to take into account a rise in the cost of raw materials amid the coronavirus pandemic”. Additionally, it claimed:
“these adjustments are made while ensuring that we avoid excessive price differentials between countries, in line with our commitments regarding price harmonization.”
Practically identical statements. And frankly, neither really explains repeated double digit spikes. Nor when taken with rumors about limitations on handbag purchases, does it add up to a full story. If Chanel is merely recouping extra expenses, why would it sell fewer bags? As for global harmonization, even before the latest pricing changes, international prices were pretty much the same.
In short, we return to a bigger unspoken intent to make its brand more exclusive. Fewer bags selling at higher prices to fewer people creates demand. And if we can’t get it, whether as unavailable or cost prohibitive, we want it more… so a Chanel flap feels more ‘exclusive’.
But, the question remains… are you willing to pay the price?
To Access Updated Prices: Chanel Price Increase for Classic Flaps on November 3rd