French luxury designer Chanel has announced that it plans to raise handbag prices in Europe and lower them in Asia to create more consistent pricing around the world. The changes will influence the prices of the 11.12, 2.55, and Boy Bag and will go into effect on April 8. Customers who buy Chanel bags in the 15 days before the price cuts take effect can get refunds.
There are currently large price discrepancies, sometimes thousands of dollars, for the same handbags in Europe and Asia. Prices are expected to climb 20 percent in Europe and go down by 21 percent in China. Prices will also be lowered in Hong Kong, Korea, Vietnam, and Russia. They will not change in the United States, the United Kingdom, Canada, and Japan.
Chanel made the decision to change its prices in part because of the depreciating euro, which is at a 12-year low. It is also making the change in response to the gray market. Some people travel from Asia to Europe, buy handbags at lower prices, and then sell them in Asia for more than they paid, but less than local prices, and make profits. Chanel believes this has undermined the brand. The move will help create consistent prices in spite of currency fluctuations and encourage customers to buy only certified Chanel products.
Lowering prices in China may help Chanel reenergize the market. Slower growth and anti-corruption measures have caused sales of luxury goods there to suffer.
Chanel is planning to standardize prices for some of its other products this year, but the company says its prices will not be significantly above or below its European prices in other countries.
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