For the first time, the renowned medium flap bag from Chanel is now retailing for more than 10,000 euros due to a price hike. Leena Nair, the CEO of Chanel, defended the high-end company's price approach to Bloomberg, pointing out inflation as well as the use of high-quality materials and craftsmanship, reported Fashion United.
Nair argued that Chanel's price increases to stay up with industry standards are justified by the brand's dedication to quality. According to Business of Preloved Fashion's price barometer, the bag was only 6,500 dollars in 2020, despite the recent criticism around the exorbitant pricing of its iconic handbags, which are presently retailing at 10,300 euros compared to 9,700 euros a year ago.
Chanel sets the price of their bags based on their actual cost. We have had to modify our prices in boutiques due to the continuous rise in the cost of raw materials and production costs over the past year, a Chanel representative told Bloomberg in March. "This increase, with an average adjustment rate of six persons in euros, will take effect on all markets on March 27, 2024. Fairness for each and every one of our clients is at stake.
Because they foster an air of exclusivity and distinction, luxury brands can have significant pricing power because they draw wealthy customers willing to pay premium rates for goods that denote status and sophistication.
Additionally, luxury firms make significant investments in marketing, branding, and narrative to build emotional bonds with their customers and raise their perceived value. Furthermore, these firms provide excellent items that warrant their higher price points by placing a premium on quality, craftsmanship, and distinctive design.
However, since the typical monthly salary in France is between 3,000 and 3,500 euros gross, only a small number of people can afford to purchase a luxury item like a Chanel purse./BGNES