Louis Vuitton just raised prices by up to US$180 in South Korea – where will the French luxury brand squeeze customers next?
The French luxury giant appears to be cashing in as social distancing restrictions are relaxed and Korean shoppers return to malls en masse – will the rest of the world get the same treatment?
Louis Vuitton has raised prices for its wares across South Korea, apparently aiming for the critical moment of economic recovery, as shopping malls reopen to a sea of customers who have wallets full of cash and are ready to spend.
The mark-up came only two months after the luxury brand increased prices by between 3 and 4 per cent in March.
The latest price hike varied for handbags and clothing items, but price increases ranged from 5 per cent to 10 per cent.
The French fashion house did not offer any explanation as to why it increased its prices in Korea.
“We have decided to raise the prices starting on May 5. It was part of our pricing policy based on the long-term view. Though, we cannot comment on how much we have increased our prices regarding individual items,” a Louis Vuitton Korea official said.
Louis Vuitton increased its prices twice in 2019, first in February and again in November. The mark-up in March came just three and a half months after the previous price increase but it has never raised prices twice in the first half of the year.
Luxury retailers usually hike prices in four situations. First, when their head office decides to increase prices globally; second, when the exchange rate fluctuates; third, when production costs go up; and lastly, when labour costs rise.
Industry insiders say a bad exchange rate and the shutdown of Louis Vuitton's production lines in France and Italy have pressured the fashion brand to pass the financial burden onto its customers.