If you noticed that Chanel took its handbag prices off its website earlier this week, we now know why: yesterday, Women’s Wear Daily reported that the brand will begin “harmonizing” its global prices on April 8. That means some markets will see significant increases in handbag prices, while others will see big drops.
For shoppers in the US, the impact of the policy change will be somewhat subdued, but those who frequently buy in Europe and Asia are probably already aware of the issue Chanel’s trying to resolve with its new policy. Because of currency fluctuations shown on the trading software test and the decreasing power of the euro, a Chanel bag bought in France can cost as little as half of what it costs in China.
Naturally, that leads to enterprising resellers who scoop up as many bags as they can in the European market to sell in Asian countries, where prices are steep. The reseller charges a bit of a markup and makes a profit, the buyer saves some money and still gets the bag and, ultimately, Chanel loses control of its supply chain and all the valuable market data that goes with it. It also muddies the waters when consumers are trying to sort out what’s real and what’s counterfeit.
The first three pieces of Chanel inventory to get this treatment are three popular handbags: the Boy Bag, 11.12 Flap Bag and Classic Flap Bag. According to WWD, the price of Boy (the size isn’t stipulated) in Europe will rise from €3,100 to €3,720, while in China, it will fall from ¥32,700 to ¥26,000. For the 11.12, the European prices will rise from €3,550 to €4,260 and the Chinese prices will fall from ¥38,200 to ¥30,000. Even if you’re not familiar with the exchange rates, you can tell these are large changes–the Boy Bag will increase by almost $650 in Europe, which is a far larger increase on a $3,300 bag than the usual 10%. The changes for the Classic Flap weren’t released, but because the previous prices were the same for it and the new 11.12 bags, shoppers can likely expect similar prices in the new structure.
As previously mentioned, American shoppers don’t have quite as much to worry about; Chanel says that prices in the US, Canada and Japan are already pretty well aligned, so changes will be much more subtle than they will be in Europe and the rest of Asia. When we have information on what the changes will be and when they’ll take effect, we’ll pass it on to you.
There’s another element to this story that goes beyond in-boutique sales, though. The Chanel representative who spoke with WWD indicated that these changes were “about the future” of the brand, and, when pressed, admitted that wouldn’t just be in brick-and-mortar stores. There’s no date for when Chanel will embrace e-commerce for its bags, of course, but keeping prices roughly equal (the goal is to vary less than 10%) across global markets is an enormous step toward making online sales possible.