Why have Chanel handbag prices increased? Cause explored as president of fashion says the brand competes with Hermes

On Thursday, President of fashion for Chanel, Bruno Pavlovsky, divulged distressing news for the label’s consumers that it will once again raise the prices of its handbags.

While speaking to WWD, Pavlovsky was asked to explain the reason behind the label’s decision/ He bluntly compared Chanel’s handbags to Hermès bag and said:

“Hermès bags are great, but I think our bags are very different. The construction of our bags is different, as are the materials. Even the way you wear them is different. So yes, we do compete with Hermès, but we are not in competition on a specific handbag.”

The news seemed even more upsetting as in November last year, the French luxury house increased the price of its 2.55 and Timeless Classic handbags. The latest price hike has been announced in less than six months.

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Know more about Chanel handbags price hike

As reported by WWD, the label has altered the costs of its four primary handbags as well as of spring ready-to-wear collection in different proportions for different regions. The rates have been raised by 6% in Europe, 5% in the U.K., 8% in Japan, 5% in South Korea and 2% in Hong Kong.

For now, prices in the U.S. and China remain unaffected. Since the beginning of the coronavirus pandemic, these price modifications have been made for the sixth time.

The variations in prices are noticeable, as the price of the ageless 11.12 bag has increased from 7,800 euros to 8,250 euros. Boy, 2.55 and Chanel 19 bags also have inflated prices.

Being responsive to the growing vocal discontent among purse connoisseurs, Pavlovsky communicated the brand’s strategy via WWD. He elucidated the label’s price harmonization policy that was introduced in 2015. The brand’s pricing policy guarantees that the retail price of any individual product must not vary by more than 10 percent from region to region.

Pavlovsky also added that this step intends to limit parallel markets, stating,

“Our objective is to offer the same price everywhere to limit the parallel market. It’s an important signal to our customers, because it’s a way of engaging with them in an honest way. Nowadays, there is no reason to penalize a Chinese customer versus an American customer. It’s normal that they should pay the same price for the same product.”

He continued,

“That’s our choice as a brand. But what that means is that if we let prices slip between Europe, for example, and Asia, we know that we are directly or indirectly feeding a parallel market, which is not very satisfactory for our point of view with regard to our local customers.”

Apart from the price harmonization policy, Bruno also mentioned other reasons behind the decision. He stated that the brand has heavily invested money and expertise in improving the quality of its handbags in order to ensure that each item meets its environmental responsibility benchmarks. Taking the label’s, Corporate Social Responsibility (CSR) into account, Pavlovsky says,

“Today, we’re investing in our bags to make them even more beautiful, using the finest materials and the latest technologies with the aim of ensuring that these bags are aligned with the CSR transformation that we want them to reflect. We’re noticeably increasing the perceived quality of these bags.”

Quoting the sustainable measures taken by the brand, he referred to Chanel’s seven tanneries which are located in different areas of France, Spain and Italy, and used chromium-free and waterless methods.

Another reason cited for the increase in price was that in 2021, the fashion house extended the warranty for its handbags from two years to five years under its “Chanel et moi” program. The program offers bag maintenance and repairs.

Chanel has hastened the rate of price hikes since the start of the COVID-19 pandemic, partly due to rising production costs and partly to positioning.