Why do Luxury Brands Increase their Prices Every Year?
You may be wondering, What is going on with Luxury Brands raises their prices multiple times a year? More likely than not, you’ve probably seen these price raises talked about on social media, read it in the news, or even experienced it yourself. Well today, I’m going to breakdown for you why do Luxury Brands increase their prices every year, plus debunk a few myths I’ve heard.
Chanel is one of the worst offenders raises prices in 2020 by 20% on their Classic Flap bag and have shown no signs of stopping anytime soon. Chanel is “claiming” their Classic flap bag is not trying to be price competitive with the Hermes Birkin, despite all signs pointing to it. I’ve written an entire price breakdown of Chanel Flap bag, you can read about here.
Chanel isn’t the only offender raising prices every year, Louis Vuitton shocked us all in 2022, by announcing a pretty substantial price increase, one bag even going up by 38%. However, it isn’t uncommon for Luxury brands to increase their prices every year.
Why Do Luxury Brands Increase their Prices Every Year?
You may be wondering, why do luxury brands increase their prices every year? Luxury brands, similar to even groceries, are always increasing their prices every year. The first reason luxury brands increase their price every year is because of inflation. According to the US inflation rates, inflation went up by 7% in 2021. You’d expect this inflation amount to be passed on and reflection in the price of luxury bags. Also, you will see things such as production costs increasing on the brand side, and the third main reason on why luxury brands increase their prices every year is because of the fluctuation between the different currencies.
In short, there are 3 main reasons luxury brands increase their prices every year, the first is inflation, the second is the increase in cost to product the luxury goods, and finally the third reason is due to the fluctuation between the different currencies.
This is why I always recommend to people, if you are thinking about buying an iconic bag from a luxury brand such as the Lady Dior, Hermes Birkin or Kelly, and Chanel Classic Flap bag (just to name a few) then it’s better to do it now before another price increase happens. Based upon trends, you can almost predict when these brands will increase their prices, but you never truly 100% know when. The only thing we do know, is that the classic, timeless bags, neutral colors always increase in price and are never sold at a discount at the retail store.
Which Luxury Brands Increase their Prices Every Year?
The truth is, all luxury brands increase their prices every year. This isn’t a new thing that just started happening. I think what we are seeing now is huge price increases, that outpace the annual inflation. I remember the day I bought my Neverfull for well under $850, now they are selling for over $2000. So what has happened in the time since I bought the Neverfull vs now?
The most popular luxury brands that increase their prices every year on iconic staple pieces include: Balenciaga, Balmain, Bottega, Boucheron, Burberry,Cartier, Celine, Chanel, Chaumet Chloe, Dior, Fendi, Givenchy, Goyard, Gucci, Hermes, Louis Vuitton, Prada, Salvatore Ferragamo, Tom Ford, Valentino, YSL / Saint Laurent, and Van Cleef & Arpel.
Keep in mind that these brands will increase their staple / timeless pieces between 1-3 times a year. With that being said, it is possible to find non-staple pieces at a discounted rate or even now be impacted by the price increase of the iconic items. So if you are open to buying a lesser known Louis Vuitton bag, then there is a good chance it won’t be as impacted by a brand-wide price increase.
Are Luxury Brands Still Worth Investing in?
I do still believe that luxury bags are still worth investing in! In fact, I would double down on investing in timeless, classic, luxury bags. I know it’s tempting to buy and invest in trendy and unique bags, but spending a lot of money on a bag that is trending won’t be good down the road if you ever want to sell it. Trends come and go, so definitely invest in the classics before you start purchasing trend bags.
When it comes to colors and which color bag to purchase, I always recommend getting your bag in a neutral color, it’s easier to match your outfit to, it has a higher resell value, and it’s timeless (meaning that the color will never go out of style)
Do Luxury Bags, Accessories, or Clothes ever get Discounted?
You may be wondering, well with these price increases happening all the time, is there somewhere I can buy discounted luxury brands or luxury bags? Given that the classic / timeless pieces from luxury brands never go on sale, I always tell people the best place to buy Luxury brands at a discounted price is through the preloved market, sometimes you can find it at theft stores, or even estate sales. Although with the last 2 (theft stores / estate sales) you must be weary of their authenticity. Many times, these designer brands will discount accessories and clothes in store, however, the timeless luxury bags will never be part of the markdown.
OR you could always travel to Europe to buy a European luxury designer bag, they are definitely cheaper in Europe vs the US. If you want to see a price breakdown, of luxury brands in Europe vs the US I recommend check out this article.
Recap on Why Do Luxury Brands Raise Their Prices Every Year?
In Conclusion, there are 3 main reasons behind why luxury brands increase their prices every year. 1. Because of Inflation, 2. Product Costs increase 3. Fluctuation between the currencies. Luxury brands increasing their pricing every year isn’t a new thing, they have been doing it for years, but what you are seeing now is the timeless / staple pieces from luxury brands are increasing at a high percentage. If you are looking to purchase a luxury bag or accessory at a discount, I recommend checking out the preloved market.
I’d love to hear from you, what are your thoughts on luxury brands raising their prices every year?
Sincerely Petite in Paris,