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Chanel Doubles Down On Price Increase Strategy As Sales Soar Despite Luxury Slowdown

Rising 16% amidst the global luxury slowdown...

In the post-pandemic world, you can be sure that where there are bags, there will be price increases. There’s no greater example of this than at the House of Chanel, where twice-yearly price increases have become the bain of collectors’ existences, with fans clamoring to snag their must-haves as soon as rumors of a looming increase begin.

Chanel continuously cites inflation, currency fluctuations, and the ever-increasing rise in the cost of materials and labor for its bi-annual price increases. While the exorbitant price hikes have consistently come under fire from critics and fans alike, the strategy is working, and demand continues to grow.

High Price, Higher Demand

While the overall luxury landscape has been bleak, Chanel defied the odds, reporting earlier this week that its 2023 sales jumped to a record high. Clocking in at nearly $20 billion, the French Design House clearly benefited from the strategy, citing a 16% increase from the previous year.

Earlier this year, prices rose by 6% on average, a much smaller increase than the previous year. Still, we’re not out of the woods yet. Chanel’s CFO Philippe Blondiaux stated that fans should be on their toes for a second price increase towards the latter half of the year to adjust to the rising costs of materials.

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Margot S.
Margot S.
21 days ago

It would be interesting to know whether Chanel handbag sales (as opposed to overall sales) have increased. It seems anecdotally that many people (including me) have stopped buying Chanel handbags due to decline in quality and increase in prices to the level of Hermes.

Observer
Observer
19 days ago
Reply to  Margot S.

I have stopped buying too. Recent classic flap lineups r rather appalling in the caviar leather quality, the puffiness, n thickness. Oh the base of the current cf bag is so different from a few years ago…

Brigitte
Brigitte
20 days ago
Reply to  Margot S.

I have been buying Chanel bags and clothes for over forty years and I see no decline in quality.

Faye
Faye
15 days ago
Reply to  Brigitte

My experience mirrors your experience. Although a small collection spanning from 2015 to 2023, each of my handbags is in excellent or like new condition. I shop via text message or a phone call with my SA at Chanel. I only go in the store if I happen to be at Neiman’s (which is rare) and I want to see what jewelry they have in stock. Because of the price increase, I will not buy the classic flap or 19 at the current prices. Other handbags, if I love it enough I will.

Brigitte
Brigitte
18 days ago
Reply to  Brigitte

I am just sharing my experience. Keep your venom to yourself. If you can’t say something nice, then don’t say anything.

Ar De
Ar De
14 days ago
Reply to  Brigitte

The company is extorting loyal clients. I agree with you

Puplover
Puplover
16 days ago
Reply to  Brigitte

You know there is always a Karen out there. Patiently trolling the comment sections to give their unhinged opinion lol. As if she has stocks in the company

Observer
Observer
19 days ago
Reply to  Brigitte

U must be their high net worth client who gets invited to previews for the first dip in new launches n line up of new products of the season. Usually these products are of better quality as they get presented to Channels preferred clients first before the rest of the masses do ever get a chance.

Brigitte
Brigitte
18 days ago
Reply to  Observer

lol no I wish. I am not a big client in the grand scheme of things. I buy a bag and maybe 10 pieces of clothings / shoes each year.

Amy Battle
Amy Battle
21 days ago
Reply to  Margot S.

Your experience doesn’t represent the global experience.

James
James
21 days ago
Reply to  Amy Battle

Have you been blind Amy??? Oh dear 😱

Anon
Anon
21 days ago
Reply to  Amy Battle

I’m in Australia and I feel the same!

Terri
Terri
21 days ago

“To adjust to the rising costs of materials.” Hahaha mm hmmmm.

Chad
Chad
17 days ago
Reply to  Terri

‘member when Chanel actually used real gold in their bags?

Selene
Selene
13 days ago
Reply to  Chad

Last time they had real gold was in 2008 and 2009. The newer bags do not look anywhere near as luxurious.

Paris
Paris
21 days ago
Reply to  Terri

Exactly, 20 billion in profit doesn’t equate to “the rising costs of materials”.

Debra White
Debra White
20 days ago
Reply to  Paris

20 billion in sales is not profit. Id say sales are flat. The 16% increase in sales are directly correlated with the handbag price increases. This means more people did not buy and the overall increase is simply due to the increase in prices for their leather goods.

Paris
Paris
15 days ago
Reply to  Debra White

You aren’t correct, please do your due diligence research and you’ll be better informed.

Dannd
Dannd
20 days ago

Everyone is saying that these price hikes are scaring away buyers but I honestly think they are hiking the prices to fleece their HNW customers instead. Those who arent HNW notice it a lot more but to someone who is HNW the difference of $2000 to $4000 is really like $2-4 to them. They have so much money, the price increase really doesn’t effect them so Chanel KNOWS they will still buy their bags and that increase will push out customers who arent within that demographic. I mean you really think a Saudi princess is going to care if her Chanel bag went from $10,000 to $30,000? No, she wont. Its a literal drop in a bucket. Chanel is just fleecing the rich and pushing out the poor. Just my thoughts on this.

Tana
Tana
15 days ago
Reply to  Dannd

Exactly! The Nouveau Riche (specially where I live which is SE Asia) didn’t care. They have money, they just buy whatever they want.

Anon
Anon
19 days ago
Reply to  Dannd

I agree but there are only so many Saudi princesses and they only need so many Chanel bags before they are over it. The reality for these luxury brands is that the “special purchase” clientele who are occasional but desire the brand is important over the longer term. Personally I don’t care about owning a rose gold Bentley because I’ll never have one. It’s not even within my selection or consideration set!

Carrie K
Carrie K
21 days ago

I’m honestly shocked because from my personal experience, Chanel stores are no longer that busy. There are no longer lines in front of most Chanel stores. Classic flaps & WOC are readily available. The only bags that are still impossible to get are classic minis and mini shopping bag aka the Chanel “Kelly”

Pat Holub
Pat Holub
20 days ago

I bought a very unusual Chanel bag 15 years ago that I am almost afraid to carry anymore. I have actually been thinking of selling it. I’d rather carry my Ferragamo, Prada and Louis bags.

Swizzlestick
Swizzlestick
9 days ago
Reply to  Pat Holub

Why are you afraid to wear it?

Pat Holub
Pat Holub
8 days ago
Reply to  Swizzlestick

I probably shouldn’t be.

Sandy
Sandy
21 days ago

Ugh! I really love Chanel! The quality of the Classic bags remains high IMO but the quality of some seasonal bags can be suspect. The seasonal bag prices are steep, so quality should be there. I am glad I made several purchases a few years ago, the price of my Jumbo has doubled! My first WOC was $1800.00. I do want a Chanel camera bag (a quilted version) but may look at alternatives …perhaps!

Shauna
Shauna
20 days ago
Reply to  Sandy

Love Love Chanel too! I purchased several years ago, so happy that I did! If I had to buy the jumbo today I don’t think I would. My most recent was the 19, last year. I want more but can’t wrap my head around the rising cost.

Elenka
Elenka
20 days ago

Not much inventory.Who bought before will still be buying..And nothing wrong with quality.You guys are probably mad that it’s too expensive for you,but be honest it’s all about exclusivity.

Anon
Anon
16 days ago
Reply to  Elenka

I have bags from the 90’s, flaps from the mid 2000s and more recent designs and there is a difference. For example hard wear is more hollow and less gold, the bags look more worn more quickly, more bags have fabric lining, the logo on my 19 bag has started to turn from gold to silver or whatever the colour underneath is. Personally I think this is more about greed than exclusivity. The boutique experience is no different to shopping at Zara and even Louis Vuitton which I visited recently positively surprised me with the care and customer service even while just browsing. One Chanel store I do enjoy and had always had great service is London Heathrow.

Observer
Observer
19 days ago
Reply to  Elenka

It’s is about exclusivity as Chanel is after an ultra luxury category goods much like the same category as would Ferrari, Lamborghini in the automobile industry. Therefore, no surprises really then for the constant price increase to stay on top of the game. Now I am waiting to see if it will eventually dethrone Hermes as top dog

datura
datura
20 days ago
Reply to  Elenka

Nice….not.

datura
datura
20 days ago

I hope the lower level employees are getting some of these profits via pay rises!

Israel Sands
Israel Sands
20 days ago
Reply to  datura

I was told by a friend who manages the Bal Harbour Chanel store that through the pandemic every employee was paid and nobody was fired.

Heather
Heather
20 days ago
Reply to  datura

Ahahaha

datura
datura
20 days ago
Reply to  Heather

I know, I know! 🙂

NurseOrPurse
NurseOrPurse
20 days ago

I love the look of Chanel, I dove into investing in them in the late 1990’s, got most of them from the retail stores, but also bought vintage. My “gateway Chanel” was a single-flap jumbo, caviar with SHW; soon thereafter got a GST in black patent with SHW; then, in order of purchase: a glazed-distressed beige single flap back (I guess it’s a seasonal, but reminds me of classic flaps) a large black lambskin boy bag with distressed GHW, (that was @ 2012), a large black caviar quilted tote w/GHW, a vintage small black patent box shoulder bag with GHW, a glazed black distressed quilted reissue 226 in So Black, a medium Chanel 19 in black lambskin, a shiny gold croc-embossed WOC (the Egyptian collection?). And when I was in Paris with my sisters @ 2014, I bought a seasonal shoulder bag with a thick chain top handle in RHW, in a browny-plummy caviar leather. I believe I’ve reached Chanel “purse peace”, and thank goodness, because the last purse I bought, in @2021, was the Chanel19 and it was something like $6,300. And I was disgusted with myself. I love it, and I use it, (I use them all, except maybe the GST), but I knew that was probably the last time I’d buy a new Chanel bag. My first Chanel bag cost @$1,600., and I was horrified back then!! Is anyone feeling too self-conscious nowadays to use their Chanel bags? I’m always sensitive about where and when I wear any of my designer bags, but I’m wondering if Chanel is sending too strong an elitist vibe, more than usual, and certainly more than other brands, except Hermes

Swizzlestick
Swizzlestick
9 days ago
Reply to  NurseOrPurse

Why are you buying bags that horrify you or make you feel disgusting? Why in the world would you feel odd carrying bags you chose to purchase?

And how is Chanel more elitist than Hermes or other luxury brands like Moynat?

Respectfully, it seems like something else (an odd misplaced guilt?) is impacting your view of your Chanel bags that has zero to do with the brand.

Paris
Paris
15 days ago
Reply to  NurseOrPurse

I don’t understand the feeling of discomfort, etc. when carrying Chanel bags. Whatever Chanel’s market strategy doesn’t affect me carrying my bags.
I feel the same about my Hermes Birkin & Kelly. I carry them despite some people feel the Kardashians have negatively influenced the sales, or diminished the brand, but I don’t aspire to that way of thinking. I carry my bags because they’re beautiful & it took me years to acquire them since I was raising 3 children, putting them through college and then law school. Only then, could I afford to indulge.

Tara L Thompson
Tara L Thompson
20 days ago

Seriously it does not make no sense how much chanel costs are. Please make sense out of it.

October_sky
October_sky
16 days ago

Chanel wants to be in the Hermes league and wants to leave the tier of LV, Prada and Gucci far behind

Ar De
Ar De
14 days ago

The quality of Chanel is no longer worth the price. And the designs are becoming simply tacky. A shame.

Luli
Luli
10 days ago
Reply to  Ar De

Agree. Espeecially RTW. Use hooks instead of buttons, cheaper material and prices twice what they were only a few years ago.

london
london
15 days ago

Sales volume vs income. If you increase prices by 16% and your volume is down, you’re still showing an increase.

Selene
Selene
13 days ago

I stopped buying Chanel after Karl’s last collection. I do not like the direction Chanel is moving towards now.

Mignon
Mignon
3 days ago

Poor people are upset cause they have been outpriced. Oh well…

Over it!!
Over it!!
3 days ago
Reply to  Mignon

Ewwwwwwwwww the garbage showed itself

Over it!!
Over it!!
3 days ago

I’m over Chanel at this point between the price increases, the horrible quality, the terrible attitudes at the boutiques, and them not having any in store inventory. I’ve switched to Hermes pre loved and have 3 Birkins I love that I feel were worth the price rather than bonded leather and fake gold. I love you Chanel but you never loved me!