Louis Vuitton just raised its prices again – will Gucci and Hermès follow? Fashion costs went up in 2020 and 2021 during the pandemic and luxury watchers predict it happening again

Feb 16 , 2022

Will Gucci raise its prices again amid the pandemic? Photo: Bloomberg

Investors are curious as to whether Gucci-owner Kering and Hermès will raise prices to take advantage of ‘revenge spending’ – like Louis Vuitton recently did

Chanel increased handbag prices three times in 2021 and Balenciaga did the same in China in January, according to social media platform Xiaohongshu

When Gucci-owner Kering and Hermès report earnings this week, investors will be looking for signs that the big luxury fashion groups are confident that wealthy shoppers are willing to pay higher price tags for designer accessories.

Rival Louis Vuitton, the world’s largest luxury label, said on Tuesday, February 15, it would raise prices globally from February 16 due to higher manufacturing and transport costs – one of the first major luxury brands to do so this year.

Pricing power could emerge as a key driver of revenue growth again in 2022 for the top tier of the fashion and leather goods industry, following a string of price hikes in 2021 and 2020.

A Gucci sign is seen outside a shop in Paris, France, in December 2017. Photo: Reuters

Consumers came out of lockdowns eager to spend their cash on luxury fashion and accessories, after months of being stuck at home. Brands are taking advantage of that spending power to make their wares even more costly and exclusive.

Bloggers on China’s social media platform Xiaohongshu are forecasting higher prices from Kering profit engine Gucci from as soon as Friday, February 18. Gucci’s small Marmont shoulder bag, which currently costs 16,500 yuan (US$2,600), is seen going up around 3 per cent, while other Gucci accessories could climb 10-15 per cent.

Users of the Xiaohongshu site, known in the industry as Little Red Book, often cite sales associates for the fashion labels and have a track record of correctly predicting price increases but do not always specify their sources.

Hermès stores can be found across the world in department stores. Photo: @ritzmagazine/Instagram

Kering’s Balenciaga already raised prices in early January in China, according to the Xiaohongshu site. The cost of the label’s curvy Hourglass handbags in size small and extra-small, for instance, has risen by 3.5-4 per cent to 17,500 yuan and 11,550 yuan respectively.

Kering declined to comment, noting it is in a closed period ahead of its annual earnings on Thursday, February 17.