Chanel adjusted prices for its premium products in China after demand for luxury is waning amidst a drop in consumer spending and revenge shopping in the post-Covid era is over.
According the Bloomberg the French luxury brand also implemented price hikes in Taiwan, Thailand, Malaysia, Australia, and Japan, resulting in an overall increase of 6 to 8 percent, citing currency fluctuations.
Chanel stated that such price adjustments are part of their commitment to price harmonization and are reviewed twice a year, typically in March and September.
While luxury brands have considerable pricing power and can raise prices without losing customers, there have been signs over the past year of more cautious spending behaviour, particularly among aspirational consumers buying entry-level luxury items.
Economic challenges, including a post-pandemic slowdown and a challenging youth job market, have contributed to a decline in consumer confidence in China and affected the shares of luxury groups such as Richemont and LVMH, Bloomberg said. Upcoming earnings reports will provide further insights into the state of the luxury goods market.