The cost of many luxury goods is going up, in a bid to regain their exclusivity. With many cheap fakes and knock-off designer items on the market, many fashion brands are choosing to further hike up their prices to remain attractive to an exclusive clientele. This isn’t a new concept, however, this new increase is a much higher one than historically seen and there is a few varying factors which are affecting the market and causing these hikes to occur.
These are a few of the main reasons why you can expect to see your favourite luxury goods increase in price over the next few months, such as:
Wanting to attract only a certain type of customer
Increasing prices can help portray a brand that is only for the wealthiest amongst society – the optimum of exclusivity and luxury. Luxury goods can often be categorised as Veblen goods, where the increased price correlates to the desirability of an item. Well-known fashion brand Prada, for example, announced in 2020 that they were going to increase prices by 13%, and their revenue went on to increase by 8% that same year. If you currently own a designer item, due to the large price hike that is currently going on within the market, it may be a good time to sell your item. You are likely to get higher price for you item than what you made, meaning you can invest the money into a new designer item – or keep it for a rainy day!
Cost of production
Two-thirds of UK adults had their cost-of-living increase within the last month, and British consumers are in the midst of a devastating cost of living crisis. Almost every industry has had to increase its prices, from the changing interest rates, to the increase of food, electricity bills, transportation, and gas prices that are ever rising. Similar to the cost of everything at the moment, the fashion industry isn’t able to escape the rising costs. This means that they are being hit by an increase to their operation costs, and many are choosing to reflect this within the price tag.
According to sources cited by The Sunday Times, some brands are intending to raise prices by as much as 20%, while others have already increased prices by around 30%. This is a huge jump for the average customer, who is already being hit by the increasing costs from other sectors. One prime example of where this is happened is with the classic flap handbag from French fashion giant Chanel, where an already expensive item has recently seen a large price increase, going from £5,780 to £6,630 in just one year.
Many of your favourite brands will be set to follow in their footsteps, so if you are wanting to buy a designer item it may be worth purchasing now before any bigger price hikes take place, or waiting until the market becomes more stable to ensure your item is profitable in the future.
