Snatching up bargains in Europe might be a thing of the past for Chinese luxury travellers if the major labels get their way. LVMH Moet Hennessy Louis Vuitton SA and several other luxury brands are planning to raise prices in Europe as a way to make up lost profit in China.
"The combination of the two is unfortunate because what you’ll find is higher prices and at the same time lower disposable income for domestic European customers," said Luca Solca, global head of European equities at CA Cheuvreux. He explains: "What we expect luxury companies to have to do is progressively close the pricing gap and, more likely than not, this is going to come from stepping up prices outside of Asia. You cannot continue to sustain the existing price gaps that have been a mainstay of the luxury goods industry for the past 20 or 25 years."
(Source: red luxury)