CHANEL implemented a new round of price adjustments on September 1, 2023, with the official website also raising prices for popular bag models The latest price for the CHANEL Classic Flap now exceeds NT $350,000, putting it on par with the official price of the Hermes Birkin bag. With the ongoing Chanel VS Hermes debate, has Chanel truly caught up with Hermes?
- Rising prices are closing to Hermes’
- Introduce a purchase restriction policy
- Value added space In Secondary market
- The importance of creating “explosive”
- Is Chanel still worth buying?
- Conclution
Chanel VS Hermes :Rising prices are closing to Hermes’
While selling well, CHANEL of course continued to raise prices. CHANEL’s Sales performance grew by 17% in 2022, and CHANEL global Chief Financial Officer Philippe Blondiaux stressed that the increase in comparison bags was in line with inflation. Bruno Pavlovsky, president of Chanel’s global fashion business, also mentioned the impact of production costs, raw materials, transportation and inflation, and that adjustments must be made to ensure that retail prices in different markets do not vary by more than 10 percent. Even with the price increase, it had no impact on CHANEL’s performance and sales. However, CHANEL, previously competing in LV’s price range, is now Hermes’ biggest rival.
Introduce a purchase restriction policy
CHANEL is rapidly increasing prices, approaching Hermes in terms of speed. The largest price increase by Hermes occurred in November 2021.CHANEL implemented a “purchase restriction policy” in October last year, limiting consumers to one classic bag per year and no more than two card holders or small leather goods. This may discourage hesitant fashion fans due to higher prices, but it doesn’t seem to impact its core consumer groups. On the contrary, it attracts high-level customers and enhances the perceived value of their products. The approach may seem like abandoning middle-class consumers, but it is essential for upholding brand image preserving product value. It also appeals to socialites at the top of the pyramid who appreciate rare understated luxury.
Chanel VS Hermes : Value added space In Secondary market
However, in the second-hand market, the value-added space of CHANEL bags is still far from Hermes. International auction house Christie’s (Christie’s) in 2021 for 3.37 million Hong Kong dollars (about 12.6 million Taiwan dollars), the auction of Hermes fog white Hemaraniro crocodile skin 25 cm insewed Kelly bag, setting a record for the most expensive bag in auction history; Results did not expect that in 2022, a Himalayan crocodile skin 28cm insewn diamond Kelly bag was sold for HK $4 million (about NT $15.47 million), and the most expensive CHANEL bag in the same auction was auctioned for HK $125,000 (about NT $510,000), a 32 times difference in price.
The importance of creating “explosive”
When it comes to CHANEL’s upcoming popular bag models, it’s no surprise that there will be 22 is also the first “explosion” created by creative director Virginie Viard since taking over.CHANEL can in the price increase, still let the financial report continues to rise, one is due to the price increase of hunger marketing to promote many people to buy, another credit is the super hot Chanel 22 bag.
Eagle-eyed netizens noticed that CHANEL’s official website removed all styles of the Gabrielle series stray bag in December last year, which means they stopped selling it. The move has prompted fashion fans to move away from retail and embrace the resale market, where online searches continue to rise, both online and in stores. Therefore, whether it’s CHANEL or other luxury brands, the decision to “adjust the become a driving force behind the income of the second-hand resale market.
Is Chanel still worth buying?
After several price increases, CHANEL has become an unreachable dream for many people. However, will high prices and continued price increases affect CHANEL’s core consumers? Not so far. The preservation effect of CHANEL classic bags will continue to attract collectors and enthusiasts who need multiple bags. And CHANEL is constantly raising prices every year, and this trend is likely to continue. Therefore say that CHANEL classic bags will never become cheaper. From an investment perspective, buying CHANEL bags remains a wise choice.
The middle-income CHANEL fashion lovers mainly rely on the second-hand boutique market, where prices for second-hand have more flexibility compared to official prices. CHANEL implemented a new round of price adjustments on September 1, 2023, with the official website also raising prices for popular bag models The latest price for the CHANEL Classic Flap now exceeds NT $350,000, putting it on par with the official price of the Hermes Birkin bag.
With the ongoing Chanel VS Hermes debate, has Chanel truly caught up with Hermes? The 2022 financial results reveal double-digit growth in CHANEL’s ready-to-wear leather goods, and jewelry collections, expanding their customer base. The shoe market has become a means for CHANEL to connect with the younger generation.
Conclution- Chanel VS Hermes
In my opinion, Chanel is still not on an equal footing with Hermes. But it is clear that Chanel is working in this direction.
What do you think? You are welcome to share your views.
