French luxury fashion house Chanel has announced that it plans to increase retail prices again globally, the second time it has done so this year.
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As luxury brands fight to keep lucrative margins on the back of the global Covid-19 pandemic and consequent retail lockdowns, Chanel said the latest price increases were “the consequence of recent significant exchange rate fluctuations between the euro and certain local currencies,” according to a Reuters report.
The iconic Paris fashion house founded by Coco Chanel added that a decrease in international travel due to lockdown made price adjustments relevant.
“These adjustments are made in all the countries where it is necessary and are the guarantee that Chanel items are sold at equivalent price levels throughout the world,” the fashion house added.
The latest price hike comes after Chanel said it would increase its retail prices back in May. The announced increase affected the prices of Chanel handbags and other small leather goods worldwide, by between 5% and 17%.
In a recent interview with Reuters, Chanel’s CFO warned that the maison’s 2020 revenues and profit would be significantly hit, without giving specific figures, thanks to Covid-19 and lockdowns. That comes after a solid 2019, where Chanel revenues rose to $12.3 billion, while operating profit was up 16.6%.
Chanel is not the only luxury fashion house to have been adversely impacted by the virus and to increase its retail prices in 2020. Italian fashion house Gucci in June increased the price of specific handbags, with variations in Italy, Britain and China of between 5% and 9%.
Meanwhile, a Reuters review of online prices for handbags by LVMH- owned Louis Vuitton also found increases in Europe and the United States.
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Consultancy Bain in June predicted that the $310 billion luxury goods sector is on course for a sales fall of up to 35% this year.