Where the luxury fashion industry is headed post COVID-19
This pandemic has changed our societal lives in ways we've never imagine. From working from home, and social distancing to sporting a facial mask, things we hardly gave a reaction to are now our new normal. Every industry has been hit hard by this pandemic and many have lost their jobs. The luxury fashion industry has been hit especially hard, having to close down stores and stop production has made brands lose in the millions of dollars. The prices of raw materials has gone up during this pandemic, many brands deciding to raise prices to acclimate.
I joined many handbag groups on Facebook and a lot of people are upset with these price increases(rightfully so), they feel like they are being taken advantage. A good amount of these people have been saving for some time to buy their special bag, and now due to COVID-19 and the loss of their job, had to rely on their savings to survive, and can't afford their dream bag. This is partly why I wanted to write about it, I wanted to share my opinion and also lay down all the facts. It's often when people let their emotions get in the way they miss seeing things from a different perspective. So please take this post with a grain of salt and remember I'm simply trying to show a different perspective so please don't shoot the messenger. Okay, let's dive right in!
Did Chanel Really Increase by 25%?
Well, yes and no, the increase is only for Chanel’s iconic handbags 11.12 and 2.55, as well as Boy, Gabrielle, Chanel 19 bags and certain small leather goods. On the high end there was a 25% change for the Mini Square Flap Bag as well as a 21% increase on the Small Classic Flap and Reissue 224. The price increase is in euros between 5% and 17% and comes as a way to keep the brands integrity. WWD reported one of the reasons for the price hike was to balance out currency exchange rates, "Chanel typically adjusts its prices twice each year in response to various market conditions, including “constant” increases in production costs and the price of raw materials, and exchange-rate fluctuations."Many people on handbag forums have bee voicing their disbelieve for Chanel's sudden price change, saying they understand not wanting to host a sale to keep the brands virtue, but felt it was completely uncalled for to raise prices in the middle of a pandemic. If this situation with COVID-19 is teaching us anything it's that we truly can live with just the bare essentials, and obsessing over Chanel's yearly it bag is now a thing of the past! People are taking this price increase as Chanel showing their true colors, considering their only real competitors are the ultimate luxe, Hermès and Dior. Chanel has bounced back in past recessions so it's no wonder why they seem so confident in their recently actions, one has to wonder could this bad timed price hike leave a bad taste in their loyal customers mind?
Chanel Quality Not Like It Once Was?
Yes! And if you're a fan of Chanel you've more then likely noticed, more so if you own any vintage pieces that the overall quality is subpar or nothing compared to the vintage items. The quality of luxury leather goods has been declining since the start of the new century as advanced manufacturing machines have taken over, true craftsmanship sadly is looking to be a thing of the past for Chanel. With things like factory shutdowns, lack of mentorships, driven by factors such as price competitions from Asia and other East European countries, as well as new workforce's reluctance to join the traditional industry. Unfortunately, consumers are buying into the believe that luxury goods are and always will be improving with modern technology and this is the furthers from the truth. Consumers need to do their research on a brand before committing to such a high price point, they need to compare vintage items with the modern version to really understand. I personally only look for vintage Chanel between 80's and 90's to really see what makes Chanel truly special. It's that hand stitching, gold plated hardware, and hand techniques. I can't stress enough the importance of luxury consumers to be informed and educated before they purchase, it is our job as consumers to challenge the current parameters and demand a fair financial playing field, and keep them to the same level of quality that's gave them their iconic representation.
It's worth to mention if you're wondering how to get a Chanel bag for the lowest possible cost, buy it in Europe. Then you can apply for VAT tax refund(Value Added Tax)and the higher priced the bag the bigger the discount in USD, the Gabrielle bag and the 19 Bag has the highest discount in Europe with around 17% to 20%. Another best kept secret is shopping at airport shops vs regular boutiques, the reason being airport retail outlets are exempt from the payment of certain local or national taxes and duties(amazing right?)you read that right no tax at airports, so I personally recommend doing that if you're looking to shop Chanel. But if you're like me and can't get to Europe soon enough you can shop at these US states with no worry of sales tax: Oregon, Alaska, Delaware, Montana, and New Hampshire.
Louis Vuitton, Tiffany's, and BVLGARI Following Chanel's Lead?
It's no secret luxury brands depend heavily on in-person boutique stores and often dealing with a scarcity of tangible cash. Once a year(sometimes twice in the example of Louis Vuitton)luxury brands will reevaluate their cost. Louis Vuitton hiked prices in Korean markets by 5% to 6% on average for some bags, garments, and accessories, and the biggest hike was 10%.
Tiffany & Co and Bulgari have also raised prices, experts report, but did not specify which products are impacted. This was Louis Vuitton’s third price increase over the first half of this year, and many local consumers are saddened by the frequent price changes. What all these luxe-heavy-hitters have in common is their loyal consumers, although they already know what comes with the name the price is to follow. Consumers will get tired of too frequent price increases.
It seems the likely hood that Chanel and all these brands are going to be fine going forward. But can we as the consumers continue to hold them to the same standard they started with? Let's go back to hand stitched-bags;) #thefutureofluxury Please comment below your thoughts or share with a friend!