It’s official: Chanel bags are Hermes prices. On March 2, Chanel raised prices up to 17% on some of its most coveted bags, including the Classic Flap and Reissue Flap. With this hike, Chanel pushed these midsize bags over the $10k mark and into Birkin territory. (A Birkin 25 Togo retails for $10,400 and a Chanel Medium Classic Flap now retails for $10,200.)
On average, a Chanel Classic Flap or Chanel 2.55 Reissue Flap will cost you 75% more today than in March 2020. The steepest hike came on the Small Classic Flap, which has increased a staggering 85%. Eighty-five percent. Three years ago you could snap up this staple for $5,200. Today, it will set you back $9,600. Even by luxury fashion metrics, that’s basically obscene. Here’s the breakdown of all four core sizes:
On its own, Chanel’s latest price hike signals confidence in the brand. Considered in context — as one of six price hikes in under three years that happened in tandem with the imposition of a quota system — (I believe) it signals the desire to establish a new brand identity. Chanel doesn’t want to compete with Louis Vuitton. Chanel wants to compete with Hermes. And Chanel wants to make sure that you know that.
Which brings us to a fundamental question: Can Chanel compete with Hermes? Will raising prices and restricting access be enough?
One thing Chanel is not doing in its quest to dethrone Hermes — or at least, hasn’t done yet — is improve the craftsmanship of its bags. The general consensus is that Chanel’s quality has remained the same, or perhaps deteriorated slightly. It’s not that Chanel bags are poorly made; it’s that they’re made (more or less) the same way now that they were made when they were half the price. Social media is packed with comments like the below:
I personally have a Chanel Classic Flap from 2008 and a Chanel Classic Flap from 2022 and they seem largely comparable to me, save the difference in cost. The fact that demand for these bags hasn’t waned as prices have skyrocketed is, in itself, a fascinating window into consumer psychology. It will be interesting to see if that demand weathers the latest hike; however, or if Chanel has finally flown too close to the sun.
It will also be interesting to see what happens on the preloved market. At the time of this post, Classic Flaps on many traditional resale platforms are still priced based on the retail prices before this last increase — meaning that right now, you can get a preloved Chanel Medium Classic Flap for approximately $1,500 less than in store. Historically, these bags have retained 95% of their retail value on the preloved market, so if history repeats, those prices will go up very soon.
It’s worth noting that there is speculation that Chanel is raising prices on its beloved bags not because it wants to compete with Hermes, but because it needs to make up lost revenue caused by weak ready-to-wear sales since Virginie Viard took over. I can certainly see that logic and appreciate the appeal of increasing profits by 17% without really, well, doing anything(!), but I also suspect there’s some emotion wrapped up in these aggressive price hikes too — and some emotion that will continue to drive consumers to buy.
Speaking of emotions, how do you feel about this price increase? Tell us in the comments!
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