Wild Luxury Price Increases, in Charts
Who thought Hermès prices could look so restrained? Chanel, on the other hand...
Why are luxury handbags so expensive? You can tell yourself a story about craftsmanship. About how an owl found an abandoned silkworm and flew it to Chanel factory, where it was nurtured on caviar and kombucha before it went to work (in a totally non-toxic environment), spinning fibers for the lining of a pocket of your Chanel bag, or whatever. Brands are happy to tell you these stories. But really, they’re just charging as much as they can and trying to prevent you from getting a better deal by traveling overseas. Because you probably will spend less in Europe, thanks to exchange rates, on a lot of this stuff.
According to a recent report in Women’s Wear Daily, luxury market analysts expect price hikes to finally start slowing after years of wild increases. Brands are no long able to “[take] advantage of post-pandemic revenge spending and… tap into the pent-up savings that customers had amassed during lockdown.” Consumers can blame inflation for some of the price increases. But inflation in the U.S. since 2019 is 22 percent, which doesn’t explain Chanel more than doubling the prices of some handbags in that period. Thanks to the detailed Chanel price lists regularly published to Purseblog.com, I was able to calculate a 104 percent price increase for a medium classic flap bag from 2019 to 2024. This figure is based on a rumored price increase in 2024 that originated on the Caviar and Chèvre social media account, which would put the bag at $11,850 this year. (Chanel is known to enact two price increases each year.)
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I never thought I would look at Hermès and think that their pricing was reasonable, restrained, or miraculously resistant to capitalist indulgence. And yet! Their price increases for a Birkin 30 in togo leather didn’t even equal the rate of inflation in the U.S. As a result, per WWD, analysts expect they’ll be able to increase prices more than others in 2024. If the rumored Chanel price increase is correct, a Birkin 30 would come in at just $650 more expensive than a medium Chanel flap bag.
Chanel is a private company, so it’s unclear how the price increases have affected profits. It’s possible they’re selling fewer bags and still earning more money. Commenters on Reddit and handbag fan sites often say the quality of Chanel bags doesn’t justify the price. Longtime stans point out that the bags used to be made with gold-plated hardware, but are now just made with gold-toned hardware. (Something to keep in mind if you’re considering acquiring a vintage bag, many of which are cheaper than the new ones.)
HSBC analysts found some truly unhinged price increases for luxury items in France. Inspired by their list, and using news reports and sites like PurseBlog.com, I created charts to show the price increases of six luxury items since 2019 in the U.S. Noted passengers on the capitalist gravy train include Canada Goose, which has hiked the price of a popular parka style to $1,650 from $995. I noticed that you can get it with a black Canada Goose badge that blends in with the jacket. So, if someone was looking at you from 20 yards away, they wouldn’t instantly know you were in Canada Goose. It’s like Canada Goose met stealth wealth and sent it a midnight “u up?” text.
Without further ado, the charts:
What do you think of these price increases? Have you noticed others in the market?
They've lost their minds. Charging outrageous prices doesn't make the item exclusive. It makes resale sites look even more appealing since you can get a great bag for a fraction of these inflated prices. I bought a Chanel bag in 2015 for about $3500 - I can only imagine what it would cost today. Is it significantly better? No. Will I ever buy another? Hell, no.
I remember when a Speedy was under $600...
I think the next 5 years are going to be very interesting for Chanel. IMO they need to reset a bit if they want to attract and retain the next generation of customers. Between the price increases, the long lines to shop in stores (queuing is not a luxury experience), and greater awareness of how Coco was basically a garbage human being it feels like the brand may lose some cache with the more socially aware younger generations