Due to the flailing euro, which has plunged 24% against the dollar over the past 12 months, European luxury brands are taking note and Chanel has announced that it will be adjusting its worldwide prices accordingly. And in China, Chanel has already been cutting prices, and seeing frenzied fanfare as a response with lines streaming out of Chanel stores. China’s craze with luxury products coupled with the news of lower prices inevitably enticed shoppers, with even more people paying a visit to Chanel. With over 40 people in line at a time, some didn’t even make it inside, being turned away by store employees because items were already sold out.
The weakening euro has widened the price gap for Chanel items to an all-time high, especially for products sold in China which have seen significant price increases in recent years. The price gap has resulted in some products in China costing 70% more than in Europe, prompting Chinese consumers to buy abroad instead. The price adjustments will help keep locals shopping in their home stores instead of traveling aboard, where unadjusted prices for a high-price luxury item could technically pay for your trip abroad. This will help the brands manage inventory, and Chanel’s move may see more luxury brands follow suit with lowering prices internationally.
Chanel’s price adjustments will roll out elsewhere beginning April 8.