Chanel, did we just breakup?!
Do you hear that? Yes, that noise, it sort of sounds like something is breaking, like glass shattering, what is it you ask? Oh, just the sound of our hearts breaking again!! I mean we are in a bad relationship with Chanel, it’s like you keep going back to that horrible boyfriend or girlfriend, and they keep saying I’ll never do it again! And what do they do, do it again! Yes, they have done it again and risen their prices!
Chanel as we cry about the prices!
As you know Chanel is one of the most luxurious brands in the world, raking in a revenue of $13.2 billion in 2021. Chanel was founded by Gabrielle “Coco” Chanel in 1910 and she ran it until the day she died in 1971. The company itself is now owned by the Wertheimer family, who has been long-time partners of Chanel’s. A few years after her death, Karl Lagerfeld, who was working for Chloé at the time was persuaded to go over to Chanel. It was in 1983, that he became the chief designer, and was there until he died in 2019. Now the creative director is Virginie Viard, she has worked at Chanel for 30 years and worked under Karl Lagerfeld. On a side note, wouldn’t it have really sucked, that after working somewhere for 30 years under the chief designer that they decide to bring in someone else, but lucky for her and I do believe for Chanel as well, that they saw her greatness.
Now that we have had our short history lesson, let’s discuss said price increases and their purchase limits. I must say that I am in my feelings. Y’all are really trying to get all the girls coins. Since the start of the pandemic in 2020, Chanel has increased their prices 6 times and a second time within 6 months. The last price increase was in January of 2022 and again now in March, on March 3rd actually, but as of right now the U.S. and China have not been affected, but I’m sure we will not be far behind. Prices for the classics are up by 6% in Europe, 5% in the U.K. and 8% in Japan. There has also been increases in Australia and Canada.
It is said that the reason for the price increases is because of the change in the cost of raw materials and they also want to avoid excessive price differentials between countries, which they are calling “a harmonization policy”. This means they want the prices of their handbags to be the same no matter which country you go to. Okay, I can kind of see this one because technically, it was better for us Americans to go to say like France and buy a bag, because it was cheaper for us.
“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” – Bruno Pavlovsky President of fashion at Chanel
So, the petty side of me is like, are they trying to make these bags more exclusive, to where only the rich can afford them? The Classic Chanel Jumbo Flap is $9,500 and the Maxi is $10,000 right now, you can literally buy a used Honda Civic for that amount! Perhaps they are trying to be like another brand, maybe their friends down the street at Hermés or do we say competitors. Dun dun duuuuunnnn. Hmmm makes one wonder. However, Pavlovsky did deny the rumors that the brand was driving the cost up in order to align itself with the rival Hermés Birkin bag.
“Hermés 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 Hermés, but we are not in competition on a specific handbag. You can’t be the most luxurious, the most desirable brand and not have a price positioning that is high on the market today.”- Bruno Pavlovsky
Well, indeed sir.
Another reason could be they are trying to recover lost profits, it was reported that there was an 18% decline in revenue and a 41% slump in operating profit in 2020.
Now, you can try and go my favorite route, and get one pre-loved. But, of course, since the new bags have increased in price so have the pre-loved ones, but you may still be able to find one for a “better” price and for sure less than $9,000. Please be careful if you go this route and check out the reputable pre-loved sites, Fashionphile, The Real Real, Vestiaire Collective, and even eBay. They now authenticate so you should be safe and if you do happen to purchase a bag and have it authenticated elsewhere, eBay can at least get you your money back. If you do not care if the bag is considered a classic, then you may want to look at their seasonal bags, those tend to be “better” priced because they are offered for that season.
Since selling and buying pre-loved designer items has become such a lucrative business, what Chanel is now doing, we should have seen it coming. In the South Korean Chanel market, they have started to limit the number of bags a person can buy per year, specifically the most popular bags, the Classic Flap and the Coco Handle. Only one of each bag can be purchased per year, and for the SLG’s (small leather goods), you can only purchase 2 of the same products. Now obviously there are other bags and items that can be purchased, so you can buy 12 bags, 12 accessories, 12 small leather goods, and 40 fragrances/cosmetics. I’m sure as time goes by this will be implemented into all Chanel stores around the world.
” Chanel’s purchasing limits and price increases are like telling consumers, if you can purchase a handbag, you belong to the club,” Gachoucha Kretz, associate marketing professor at business school HEC Paris, said.
See, I’m not only one thinking it!
In my humble opinion, again I do believe Chanel is trying to get back to being more exclusive, not having everybody and their mama having a classic Chanel flap, just like you know who. Yes, I’m talking about you Louis Vuitton Neverfull. Chanel is aiming to be more a part of the Hermés world and less of Louis Vuitton and Gucci. Which brings me to another thought, why are you releasing 6 (me hollering SIX) again 6 collections a year, with new bags coming out every collection and you want people to buy them and still be exclusive. Boggles my mind!
Some looks from Chanel Spring/Summer 22
In what appeared to be a dig at Chanel, LVMH (Louis Vuitton, Moët, Hennessy) chairman and chief executive officer Bernard Arnault in January cautioned against excessive price rises,
“We don’t want to give the impression, like some brands do, of heading toward prices that no longer match the economic reality of the price of products. You have to be reasonable. We try to be reasonable so that our customers feel that they’re dealing with brands that offer them something realistic, and not something that is artificially inflated, even if the products are very beautiful.”
So, besties, have we broken up with Chanel or will our love continue on?? Will you be purchasing a Chanel bag, or have your dreams been diminished! If you have a Chanel bag, will you be purchasing another? ORRRRR, will you try and go the Hermés route and get you a Birkin, Kelly, or Constance? Oh, and you know another bag that Hermés makes, that I love it’s the 24/24, check that one out if you haven’t seen it. I mean with a Chanel price of $10,000 why not right!?!
“Innovation! One cannot be forever innovating. I want to create classics”- Coco Chanel