Chanel raises prices for second time in 2020, and other luxury brands are expected to follow suit

French luxury house confirms second price increase, and blames exchange rate fluctuations. China, Hong Kong, Japan are among the markets affected, analyst says

Chanel risks alienating some customers, another analyst says. The price hikes come after luxury brand held what looked like an apparel jumble sale in Hong Kong

2-MIN READ2-MIN

Chanel increased prices of handbags and small leather goods by up to 17 per cent in May, and has since raised prices by a further 5 per cent. While it seeks to preserve profit margins on such items, it held what looked like a jumble sale of ready-to-wear items in Hong Kong recently.

Published: 10:59am, 9 Nov 2020Updated: 11:08am, 9 Nov 2020

French luxury house Chanel has increased prices for a second time this year, it said on Friday, as high-end brands seek to protect margins from the fallout of the coronavirus pandemic.

In a statement responding to a Reuters query, Chanel said the latest price increases were “the consequence of recent significant exchange rate fluctuations between the euro and certain local currencies”, without giving further details.

“These adjustments are made in all the countries where it is necessary and are the guarantee that Chanel items are sold at equivalent price levels throughout the world,” it said, adding this was particularly important at a time when international travel is very limited.

Chanel in May raised the prices of handbags and other small leather goods worldwide by between 5 per cent and 17 per cent.

A Chanel bag at Milan Fashion Week 2018. It is not the only luxury brand to have raised prices amid the coronavirus pandemic.

Flavio Cereda, an analyst at Jefferies, said that had been followed by another increase of around 5 per cent in October, notably in China, Hong Kong, Japan, South Korea and Britain. He expected other luxury brands to follow suit to compensate for the pandemic’s hit to 2020 margins.

Luxury conglomerate LVMH’s star brands Louis Vuitton and Dior, luxury group Kering’s Gucci, Prada and Ferragamo among others have also increased prices this year.