For the first time, Chanel’s famous medium flap bag is now selling for over €10,000 due to a price increase.
Chanel bag over 10,000 euros
Leena Nair, Chanel’s chief executive, defended the luxury company’s pricing strategy to Bloomberg, pointing to inflation as well as the use of high-quality materials and craftsmanship.
Nair argued that Chanel’s price increases to keep up with industry standards are justified by the brand’s dedication to quality. According to the Business of Preloved Fashion’s price barometer, the bag has reached just $6,500 in 2020, despite recent controversy surrounding the exorbitant cost of its iconic bags, which currently sell for €10,300, up from €9,700 in a year ago
How Chanel sets prices
Chanel prices its bags according to their actual cost. “We’ve been forced to adjust our boutique prices due to continued inflation in raw material costs and production costs over the past year,” a Chanel representative told Bloomberg in March.
“This increase, with an average adjustment rate of six hundred euros, will take effect in all markets on March 27, 2024. Fairness for each of our customers is at stake.”
Pricing power and luxury brands
Because they foster an air of exclusivity and prestige, luxury brands frequently have significant pricing power as they attract wealthy customers willing to pay premium prices for goods that denote status and sophistication.
In addition, luxury brands are making significant investments in marketing, branding and storytelling to create emotional connections with their customers and increase their perceived value. In addition, these brands offer superior products that justify their higher prices, with an emphasis on quality, craftsmanship and outstanding design.
However, given that the average monthly salary in France is between 3,000 and 3,500 euros gross, only a small number of people can afford to buy a luxury item like a Chanel bag, according to fashionunited.
