Editor’s Note
This article discusses the recent price increases by top luxury brands like Hermès and the anticipated industry-wide trend. While the original text mentions forecasts for other major brands, the available excerpt cuts off before detailing those specific projections. The core analysis regarding the annualization of such price hikes remains clear.
A domino effect of price increases across the luxury goods industry has begun from the very start of the new year. With forecasts that major luxury brands including Hermès, Louis Vuitton, and Chanel will all raise prices in unison, industry insiders are evaluating that price hikes for luxury goods have effectively solidified into an annual event. In particular, analysis suggests that Chanel, which has pursued an ultra-high-price strategy, rising to the top of global fashion brand value rankings despite repeated price increases, proves the luxury market’s formula that ‘the more expensive, the stronger the brand.’
According to the luxury industry on the 6th, French luxury brand Hermès raised prices for key product categories including bags, scarves, and shoes in the domestic market on the 5th. Among bags, the popular ‘Picotin’ model increased from 5.17 million won to 5.45 million won, a rise of about 5.4%, while the ‘Evelyne’ went from 3.3 million won to 3.41 million won, a 3.3% increase. Scarf lines also saw price hikes of around 10%. This follows price increases for some shoe products like the ‘Santorini Sandals’, ‘Royal Loafer’, and ‘Hour Loafer’ by 5.3%, 3.2%, and 3.4% respectively on the 3rd, expanding the scope of the increases.
Hermès, often called the ‘luxury of luxuries’, conducts price increases annually around the new year. With its price hike this year as usual, observations suggest that the trend of increases will continue for major luxury brands, including the so-called ‘Her-Lu-Cha’ (Hermès, Louis Vuitton, Chanel) trio.
Swiss luxury watch brand Rolex, as in previous years, raised domestic retail prices for some models by about 5-7% from New Year’s Day. The ‘Submariner Oyster 41mm’ increased from 14.7 million won to 15.54 million won, and the ‘Submariner Date Oystersteel Yellow Gold 41mm’ jumped over 7% from 27.11 million won to 29.21 million won. Its subsidiary brand Tudor also recorded an increase in the 9% range. Other major watch brands like IWC, LVMH group brands Tag Heuer and Hublot, and Japanese brand Grand Seiko have also raised prices around the new year or signaled their intention to do so.
Chanel raised prices for some jewelry products like the Coco Crush by about 5%, and French brand Boucheron is also planning price increases. According to the industry, Boucheron plans to raise prices for key jewelry and watch products starting February 4th.
With news of luxury price hikes arriving as soon as the new year began, consumer reactions are mixed. On various SNS platforms and online communities, self-deprecating reactions like “It hasn’t been long since the last increase, why raise them again?”, “Only my salary isn’t going up”, and “I have no idea who’s buying these” are prevalent. At the same time, an atmosphere of accepting price hikes as a ‘routine repeated every new year’ is also emerging. Posts asking about the timing of increases and ‘open run’ testimonials urging purchases before price hikes are also appearing.
Industry insiders believe the reasons for luxury brand price hikes are not limited to simple raw material cost increases. They explain that factors like exchange rate fluctuations, rising gold prices, and labor cost burdens have combined. However, some analysts suggest that while these external factors are presented superficially, the actual reason is a strategic choice to enhance brand scarcity and premium image.
Indeed, many luxury brands continue to achieve sales growth while raising prices multiple times throughout the year, not just at the beginning. Chanel has continued its so-called ‘ultra-high-price strategy’, raising bag prices starting last January, followed by cosmetics in March, and bags and jewelry by up to 10% in June. Louis Vuitton also solidified its premium brand image by raising prices for some products in January, April, and November last year. Prada also implemented price increases three times last year.
Among these, Chanel is cited as a representative success story of the ultra-high-price strategy. Post-COVID-19, despite raising prices for core products like the classic flap bag multiple times, causing prices to more than double compared to 2019, open runs and waiting lines in front of stores have hardly decreased. Industry analysis suggests that price hikes have actually heightened brand scarcity and further fueled demand.
According to the ‘2025 Global Luxury Brand Value’ report recently released by British brand valuation consultancy Brand Finance, Chanel’s brand value surged 45% year-on-year to $37.9 billion (approximately 55 trillion won). This figure surpasses Louis Vuitton, which had long held the top spot among fashion brands. Louis Vuitton fell to second place with $32.9 billion (approx. 48 trillion won), followed by Hermès and Dior.
Brand Finance evaluated Chanel’s rise, stating:
The overall luxury industry forecasts that this price increase trend will continue. The practice of major brands adjusting prices at the start of the year has become established, and price hikes serve as a strategy that can simultaneously enhance brand value and expand sales. Additionally, the fact that domestic consumers show relatively low resistance to luxury consumption and price increases is also cited as a factor supporting the price hike trend.
Indeed, Korean consumers have shown a relatively tolerant attitude towards price increases by luxury brands. According to a survey released last May by Bluebell Group, a global luxury brand distribution specialist in Asia, 73% of domestic consumers responded that they ‘have purchase intent’ even if luxury brand product prices increase. 80% responded that they highly consider brand reputation. 76% of respondents perceived luxury goods not as mere consumables but as investment products.
However, as consumption polarization intensifies, with demand for high-end luxury goods growing while the mid-to-low-priced market shrinks, concerns are raised that market structure imbalance may widen. Accordingly, views inside and outside the industry are divided on whether the growth strategy centered on ultra-high-priced luxury goods is sustainable in the medium to long term.