Major luxury brands such as Chanel and Louis Vuitton have increased their prices on some of their products are the most sought-after, to the extent that they seek to compensate for the lost sales during the week of the block, due to the coronavirus.
Luxury brands back to their sales in South Korea, and its main market is China, partly compensating for the decline in sales in Europe and the United States, where the restrictions are starting to be released. But, with the consulting firm Bain, which estimated that e-commerce sales $ 300 billion are expected to drop as much as 35 percent this year, halting a decade of spectacular growth, the groups from the luxury of acting quickly to protect margins.
On the 13th day of may, the republic announced that it was raising the prices of their bags in the iconic and a few small articles of leather, from 5% to 17% overall, with a time that the hiv pandemic has increased the cost of certain raw materials. These adjustments are made to avoid the differential in excessive of a price between the countries,” he said in the House of the French.
Louis Vuitton, the flagship brand of the LVMH group, which experienced an increase of more than 50% increase in sales in China in the beginning of April, it also raised the price of its stock exchanges in the United States and in Europe. For example, if your handbag Neverfull MM Monogram, which can cost $ 1,500 on their website, it cost 1.430 dollars at the beginning of may, and 1.320 u.s. dollars at the end of October, an overall increase of almost 14%. The data were obtained by Reuters, using the Internet Archive, a repository of web pages before. Louis Vuitton did not want to make any comments.
In China and South Korea, people lined up outside the stores in the Chanel, as soon as rumors of price increases, began to spread on social media. Xie Lan, a documentary filmmaker in Beijing, said he was able to buy a bag for about 30,000 yuan (4.225 us$) before the price increase. “My job is very stressful, and I wanted to give you a present,” she said over the phone.
The brand name in the north american jewelry industry, Tiffany outlet, which is being bought by LVMH, has increased the prices of some of its products in South Korea, at 10%, as of may 6, according to the manager of a store in Seoul, told Reuters. “The reality is that Tiffany’s regularly reviews its pricing strategy in each of its markets, in order to analyze fluctuations in the exchange rates amongst others”, said a spokesman for the company, in response to a question from Reuters.
Analysts have said that the strongest brands such as Louis Vuitton, they may be tempted to increase the prices due to the impact of the coronavirus was in sales, triggering a freeze on international travel, and the recession in Europe and the United States of america. “It’s a strategy to defend the banks,” said Luca Solca, an analyst of the luxury goods of the Skill, adding, however, that not all brands will follow this path, as this may cause a negative reaction from consumers.
This past Wednesday (the 13th), at Tod’s, said it is not currently planning any significant changes in the pricing policies of the group.
The brand is also dealing with a large amount of parts inventory that have not been sold, and they will be reluctant to sell them with a steep discount in the stores, point-of-sale or online, for fear of harming the sales of the full price, and the exclusivity of their products. The rise in prices also raises risks. In Beijing, Luna, Xin, a broker-dealer, financial, and said that we had to give up on his dream to buy a Chanel Classic Flap in medium size, the price of which has increased by 14.5 per cent to 48.900 yuan. In September of last year, it was 39.000 yuan, and now, it’s just a little more than half a year later, and is priced at 10,000,” said Xin.
The buyers, who are critical for the luxury brands, it accounted for 35% of your expenses for the global luxury accommodation in 2019. We also expect that their influence in the industry will grow even more over the next few years – accounting for almost half of all luxury sales by 2025.The expectation is that the global travel does not return to normal levels, for up to two years, with the chinese consumers, who were used to make up two-thirds of their luxury shopping abroad, make purchases at home, thus accelerating a trend that was already in progress.
This means that the premium brands are under pressure to align, even more, the prices in mainland China – traditionally more expensive than other parts of the world, to encourage chinese consumers to purchase on their own. The prices in China have fallen gradually over the past few years, with the government slashing import duties and taxes, which kept them to the top. The brand also spent a lot on marketing and rental income in the region. “We believe that it is essential not to penalize our customers based on geographic considerations,” she told the Republic.
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