Luxury brands are adapting to the pandemic-induced disruptions by readjusting their prices according to demand. Last month, fashion designer Victoria Beckham lowered prices of her chic dresses and separates by around 40 per cent. To offset losses, the designer aims to create simpler designs and use less embellished fabrics. She also plans to merge her diffusion line with the main one. British heritage brand Mulberry also lowered handbag prices sold in Asia. On the other hand, luxury houses such as Louis Vuitton and Chanel marked up their prices in July. Chanel increased prices of handbags by around 15 per cent.
Consumers seek meaningful luxury
Such price fluctuations have been an integral part of the luxury fashion industry for a long time. The industry is going through a lifestyle shift with consumers prioritizing comfort over glamor. It is being compelled to re-evaluate production and marketing processes. Brands are reducing the number of collections they launch every year besides expanding into newer categories. They are seeking to return to 2019 revenue levels by launching purposeful creations, opines Athena Chan, Senior Strategist-Asia Pacific, WGSN.
After the hardships of last two years, consumers are ready to indulge in opulent and optimistic designs once again. However, they aim to invest in
meaningful luxury that would last for generations. They also seek to inspire future generations to align these values with their purchases. For these consumers, buying luxury is a way to gain social recognition, says Chan.
Hence, prices in markets that have recovered from the pandemic relatively faster, such as China and Korea, have rebounded. Most price hikes are being driven by brands like Hermès, Chanel, Louis Vuitton and Bottega Veneta,
Demand for second-hand goods surges
According Luca Solca, Senior Research Analyst, Bernstein, price-rise by these brands’ indicates their popularity. Brands are gaining publicity with each of their price rises and are able to boost profit margins, he adds.
Sophie Hersan, Co-founder and Fashion Director, Vestiaire Collective adds, the pandemic is changing the way luxury pieces are being bought with consumers opting for more second-hand goods. Instead of price-tags, consumers are focusing on availability of these goods on their trusted retail channels.
