Of all the well-known designers, Chanel is considered classic and iconic. Unlike other brands that constantly reinvent and change in order to keep up with the times, Chanel gets by doing the exact opposite: staying the same. Oh sure, every year they come up with one eccentric bag just to show that they’re hip and they get “it,” but when it comes down to it, people are always buying the same thing from them – whether it be the classic lambskin flap bag or the signature quilted caviar tote.
Another distinguishing factor that sets Chanel apart from other designers is that they’re expensive. Really expensive. If you didn’t think that paying just over $2600 for a handbag was insane, well guess what? Now you can expect to pay at least twenty percent more than that. For the record, we’d like to mention that raising prices isn’t new behavior for Chanel. The brand already enforced the policy of raising the standard price on their products every six months to every year, typically by $500. Apparently Chanel isn’t the only designer that has adopted this sudden price increase. Luxury retailer Louis Vuitton updated their prices this past October, increasing classic bags by four to five percent and newer styles by seven to eight percent.
Now why are they raising their prices? For one, prestige pricing. Chanel does it simply because they can. (The thought behind this marketing strategy is that by giving a product a high price, others are then convinced that the product actually has value and status.) Apparently Chanel, Louis Vuitton and other design houses have been experiencing economic slowdowns due to China’s counterfeit bag industry. Now the designers are being forced to focus on using higher-quality materials and providing more expensive accessories in order to make up for the difference. While many other manufacturers have moved their production points to Asia, Chanel continues to make its bags in France and Italy, and the cost of labor in Europe is exorbitantly high.
Reflecting back on Chanel’s history of price increases on the classic medium flap bag, here’s what we found:
1955 – Coco Chanel debuts the classic bag, which retails for $220. Damn, where were we when those prices existed? (Not alive!) Then again, the average person’s paycheck in 1955 according to the US Census Bureau was around $4,418, which comes to $368 a month. Considering that people had families to support and other related expenses, $220 for a Chanel was pretty steep – even back then.
Here are the rest of the price increases:
1990 – $1,150
2009 – $2,695
2011 – $3,900
2013 – $4,400
2015 – $5,630 (predicted)
If you had dream of toting your own Chanel one in your near future, better start saving. At least you know that it will only be worth more down the road, and you can always sell it and make a profit. In the meantime you can scour eBay, and designer resale sites like TheRealReal, as we’re sure with this sudden news, a lot more people will be cleaning out their closets.