Oct 6, 2023
Chanel increased prices of its high-end products in China in September, amid a slowdown in demand for luxury goods worldwide after the post-pandemic boom years.
The company also raised prices in Taiwan, Thailand, Malaysia, Australia and Japan, a spokesperson for the luxury brand said, citing fluctuations in exchange rates. Overall, prices have risen between 6% and 8%.
“This is something we regularly do, in line with our commitments made in terms of price harmonization,” the representative said in an emailed statement. A classic medium-sized flap bag currently costs 80,500 yuan in China ($11,030), while it sells for €9,700 in France ($10,230).
Exclusive luxury brands are known to enjoy strong pricing power, meaning they can apply increases without necessarily losing customers. But in the past year there have been more signs that so-called aspirational customers buying entry-level products have curbed their spending.
Chanel reviews prices of its handbags twice a year, in March and September, the brand’s chief financial officer Philippe Blondiaux said in an interview with Bloomberg in May. Chanel also carries out price increases in line with input-cost inflation, he added.
A post-pandemic economic slowdown and a slumping youth jobs market has rattled China and confidence among consumers, weighing on shares of luxury groups such as Cartier owner Richemont and LVMH Moet Hennessy Louis Vuitton SE. The Christian Dior parent company will be the first luxury group to report third-quarter sales on October 10.