Everything you may need to know about why Chanel constantly raises their prices and what we can expect.
Chanel, the iconic French fashion house founded by Gabrielle “Coco” Chanel, has a history of periodic price increases like many luxury brands. These increases are often influenced by various factors including inflation, changes in production costs, market demand, and strategic positioning within the luxury market.
Historically Looking at Chanel Price Increases
Here’s a brief overview of Chanel’s history of price increases:
Beginning Years: Chanel was founded in the early 20th century, and initially gained fame for its revolutionary designs that broke away from the restrictive fashions. In 1910, Coco Chanel launched her first store in Paris at 21 Rue Cambon while only in her late 20s, and by 1913 expanded into clothing. In its early years, Chanel’s pricing strategy was focused on positioning itself as a premium brand as it expanded beyond the initial boutiques at 21 Rue Cambon and Deauville.
Post-World War II: Following World War II, Chanel faced challenges like many other luxury brands due to economic instability. However, the brand managed to maintain its reputation for exclusivity, and its pricing reflected this positioning. Coco Chanel’s design grew in popularity to an iconic status amongst the wealthy and elite. 1955 was the introduction of the Chanel Flap Bag aka 2.55 which we refer to as the Reissue now.
1980s and 1990s: Chanel experienced a resurgence in popularity during the 1980s and 1990s under the creative direction of the late Karl Lagerfeld. During this time, the brand expanded its product lines beyond clothing to include accessories, fragrances, and cosmetics. The price increases were considered reflective of Chanel’s growing status as a global luxury powerhouse and expansion continued. 1983 marks the year that Lagerfeld changed the Mademoiselle (2.55) twist lock into the double C style that’s so highly coveted today. Before this change the Reissue was often referred to as the Chanel Flap Bag.
21st Century: In the 2000s and beyond, Chanel continued to implement price increases periodically. These increases were at times met with controversy, especially in regions where it seemed disproportionately high compared to other luxury brands pricing structures. Nevertheless, Chanel maintained that their commitment to craftsmanship and exclusivity were factors that justified its premium pricing strategy. Even with large percentage jumps, buyers continue to pay the premium prices.
Recent Years: In recent years, Chanel, like many luxury brands, has faced challenges such as changing consumer preferences, economic fluctuations, and disruptions caused by events like the COVID-19 pandemic. Despite these challenges, Chanel remains at the top as people continue to purchase at the new price increases season to season.
What is really causing these increases?
Ultimately, It’s worth noting that Chanel, like other luxury brands, carefully manages its pricing strategy to maintain its aura of exclusivity while also ensuring profitability. While price increases may occur periodically, Chanel’s loyal customer base and timeless appeal often mitigate any potential backlash.
It’s really based on economics. If you look at a demand curve for a Veblen Good, the assumption is that demand for a product will increase because the price increases due to the idea of being a status symbol. We would naturally think that as a price goes up, the demand goes down, but for luxury brands they’re relying on the assumptions that these Veblen goods are highly coveted, extremely luxurious quality (which this topic can be quite controversial and subjective), these type of Veblen goods give the appearance of being affluent, and the majority of consumers cannot afford or will not purchase them in the end. Chanel knows their economics extremely well.
Then let’s be honest, look at their marketing and what it takes to maintain their luxury House, the shows, the brand and celebrity ambassadors, advertising, a lot of money needs to be spent on their empire and that translates to how they need to keep up their revenue, and that’s not even diving into production cost side of a luxury brand.
Fluctuation in currency will also have an impact, which is partly why you see the price increases happening as the brand tries to find a global equilibrium. You can seethis when price increases happen at different percentages in different countries. However, Chanel implemented a global wide price increase (last year, North America, Asia and Europe saw all their pricing go up).
They’re also looking at where the demand is coming from globally. Asian markets continued to perform high, and will buy at the increased pricing structure. They also are looking at where emerging markets are showing promise; though emerging areas can include a higher risk.
Even with the economic slowdown happening, and seeing very low sales growth the past holiday season heading into 2024, affluent communities seem to cushion against the ups and downs of the market and ultimately probably won’t alter their luxury spending by too much. Given this, Chanel would see no need to halt their yearly price increases.
We also predict that Chanel is focusing on making their brand more exclusive similar to the brand Hermes. Our luxury experts believe that since Chanel is increasing their prices rapidly and having multiple price increases within a year like in 2023 where they had 3 price increases it isn’t just about keeping up with inflation but to weed out the average person from being able to afford the brand Chanel. Chanel will eventually be a brand where only the truly wealthy can have access to buy. We are predicting that by 2028 the Chanel classic flaps will be around $20,000 in stores.
A Look at Chanel Classic Flap (Medium) Price Increases by Year:
Highest percentage of increase occurred between 2010 to 2015
● 1955: $220
● 1990: $1,150
● 2005: $1,650
● 2008: $2,495
● 2009: $2,695
● 2010: $2,850
● 2011: $3,900
● 2012: $4,400
● 2013: $4,400
● 2014: $4,900
● 2015: $4,900
● 2016: $4,900
● 2017: $5,300
● 2018: $5,600
● 2019: $5,800
● 2020: $6,500
● 2021: $7,800
● 2022: $8,800
● 2023: $10,200 (a whopping 16% increase!)
● 2024: Expected to be around a 12% price increase
Confirmed Chanel Price Increase for March 2024
The new Chanel Price increase happening March 27 in North America is expected to range between 10-20% on classic and seasonal styles!
Why we should embrace the Chanel Price Increase
If you love Chanel we would like to share a different perspective with you which may change your mind about being completely against the price increases. However, we agree that if Chanel is going to constantly raise their prices their quality needs to come first because the thing that doesn’t sit right with consumers is that Chanel bags are now the same price as Hermes yet Hermes bags are all hand stitched by an artisan where Chanel bags are machine made and mass produced. We can see that Chanel started offering a 5-year warranty on their designer bags so that’s a great start.
Now, justifying a Chanel purchase is the real question. Let’s compare this to the stock market. Pretend you could buy a stock that you knew with certainty will constantly go up in value and given the historical data of this stock there has never been a time the stock has gone on sale or lowered in value. To take this theory to the next level, imagine you could buy this stock at a discounted price than what it’s being sold for on the stock market today… Yes, I think you know where I am going with this. To top it all off imagine a stock that you could physically hold, touch and wear!!! That is just another fun perspective on how you could look at the brand Chanel and their classic bags. This analogy doesn’t necessarily work for their Ready to Wear, shoes, high end jewelry but it is definitely true for their classic bags and even certain seasonal limited edition style bags.
This is not to say withdraw your 401k and retirement plan savings and start buying all the classic Chanel bags. This is not meant to omit anything your financial advisor says and to be used as financial advice but it is a perspective from our luxury experts and other designer bag enthusiasts who are very familiar with luxury brands and fashion. Are there people who made a profit and a lot of money on reselling Chanel bags? YES! Are there people who love buying Chanel pre-owned because they know they can flip it down the road? Yes. Are there people who buy limited edition and special pieces brand new in Chanel boutiques that also increased in value after just because of how rare they are? Yes. There are also people who aren’t as familiar with Chanel and don’t make a profit and don’t care to make a profit because they love the brand and they buy the bag for the bag. It’s always just a bonus to know what you love to spend money on could make you money back and we are shedding light on this topic.
Buying Chanel brand new in stores hoping that it will be an investment is a long term game as with most investments BUT buying Chanel pre-owned on the consignment resale market can be a shorter term investment and turn into a side business for most! A new blog on “How to Start your own Consignment Resale Business” will be published next on Luxe Du Jour.
We have seen many clients buy a used Chanel bag on consignment in excellent condition and as Chanel has their annual price increases clients are able to sell that used Chanel bag for slightly higher than what they paid. Clients at Luxe Du Jour are even shocked when a bag they purchased from LDJ a couple years ago ends up being sold for a lot higher and they find out they made a profit even after our consignment fees because Luxe Du Jour prides itself on having competitive market prices in the second hand space. Our clients can shop with confidence buying pre-owned Chanel knowing our prices are one of the best in North America and knowing that Chanel is a top luxury brand that is becoming more and more exclusive and prestigious.
Is Chanel copying the Hermes model?
Another thing we are seeing with Chanel is that their coveted Classic Flaps in Black Caviar are said to be “waitlisted” especially the medium flap where Sales associates at certain boutiques are stating its a 2-3 year waitlist. Could this “waitlist” be a similar model like Hermes and their quota bags? Where only the best clients that spend a certain amount and purchase other things showing their brand loyalty will have access to purchase their most wanted Chanel classic flap? This is not the confirmed strategy that they are using by a wild guess based on what our luxury experts in the industry have seen with Chanel’s current business practices.
A great example to compare this to is when Hermes used to have their Hermes Birkin bags readily available in the boutiques for purchase. “This was just 12 years ago when I walked into my Calgary Hermes Boutique and saw a beautiful Hermes Birkin 25 in white sitting on display and was available for purchase for only $9900 Canadian at the time!” says Tammy. Now you won’t be able to ever find a Hermes Birkin on display that will be available for purchase. So it begs the question, is Chanel copying the Hermes model since now the ever so coveted Chanel classic flap in specifically medium black caviar gold hardware is no longer displayed in stores.
If this is Chanel’s strategy then the best thing clients can do is to invest in the classic flaps! Only time will tell.
Pro’s and Con’s of the Chanel Price Increases
The Chanel price increases are a benefit for those who already have a Chanel collection knowing their designer closet is increasing in value but it’s definitely a con for those who may be starting off their Chanel collection and still wants that brand new boutique experience because the longer you wait the more you’re going to be paying for that brand new Chanel bag.
How to afford Chanel and not be affected by the price increase?
Pre-owned is truly the way to go, knowing that price increases come around the same time each year, finding the best deals on consignment sites before their prices go up. Once the Chanel price increase is announced you can expect that consignment prices will slowly increase afterwards but it can take up to 6 months to reflect and affect the pre-owned prices after Chanel officially has their price increase in stores. Why? Because the prices on the consignment market are often set by the consignment business and owned by consignors.
The consignors just want their item sold and normally will not ask the consignment to price higher than what it originally was quoted and listed for. However, any new consigned item coming in you can expect consignors to expect higher listing prices to properly reflect the market value so when the newer pieces come into consignment and get listed often they will be priced higher than usual and this is how the resale market corrects itself. In other words you have a few months to shop on the consignment / resale market without being affected by the Chanel price increase. There are a lot of affordable Chanel styles for those who may be entering the Chanel market and looking for great starter bags. Consider more seasonal styles, even the vintage classic flaps where you can get the 24K plated gold hardware, they tend to run a bit less on resale.
Reason Why You Should Buy Chanel Pre-owned or on the Resale Market
1. Get Rare or Limited Edition Chanel Items that aren’t available in stores
Resale websites often have a wide selection of Chanel items, including rare or limited edition pieces that may no longer be available through traditional retail channels. This allows buyers to access items that are no longer in production or were only produced in limited quantities.
2. A better way to shop Sustainably and be a part of Circular Fashion
Buying pre-owned Chanel items is a more sustainable choice compared to purchasing new items, as it extends the lifespan of the product and reduces waste. By shopping second-hand, buyers can contribute to reducing the environmental impact of fashion consumption. This is a huge mission of Luxe Du Jour’s implementation of the three Rs into our business model. It’s an important responsibility and core commitment of our company that we want to always maintain at the forefront of Luxe Du Jour’s growth and development.
3. Finding Discontinued Colors or Vintage pieces
Chanel periodically discontinues certain styles or colors, making them difficult to find in stores. Resale websites often have a selection of discontinued Chanel items, giving buyers the opportunity to purchase coveted pieces that are no longer available elsewhere.
4. Better prices and deals on Chanel when you buy pre-owned in good to excellent condition
A huge benefit to buying used Chanel or lightly used designer bags on consignment is all the money you will save off retail price! Oftentimes you’ll be able to save thousands of dollars off authentic lightly worn Chanel pieces and the great part is Chanel constantly keeps going up in value therefore you know you are making a great investment into your designer wardrobe! Shop over 1000 pre-owned authentic Chanel bags and accessories with Luxe Du Jour. Have a Chanel item to sell? Get a free and fast quote by submitting it through Luxe Du Jour under CONSIGN/SELL or through the Luxe Du Jour app for the best shopping and selling experience.
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