A Chanel flap bag now costs more than 10,000 euros

Chanel’s iconic medium flap bag has had another price increase, now selling for over 10,000 euros for the first time. Chanel's CEO, Leena Nair, defended the luxury brand's pricing strategy to Bloomberg, highlighting inflation and the use of premium materials and craftsmanship.

Nair asserted that Chanel's commitment to quality serves as rationale for increasing prices to keep pace with industry standards. Despite recent controversy surrounding the exceeding cost of its iconic handbags, currently retailing at 10,300 euros compared to 9,700 euros a year ago, the bag was priced at just 6,500 dollars in 2020 according to Business of Preloved Fashion's price barometer.

“Chanel prices its bags according to their cost price. The price of raw materials and production costs has been marked by constant inflation over the past year, which has led us to adjust our prices in boutiques,” a Chanel spokesperson told Bloomberg in March. “This increase will take effect on all markets from 27 March 2024, with an average adjustment rate of 6 person in euros. It’s a question of fairness for all our clients.”

Luxury brands and pricing power

Luxury brands often wield strong pricing power as they cultivate an aura of exclusivity and prestige, which attracts affluent consumers willing to pay premium prices for products that signify status and sophistication.

Furthermore, luxury brands invest heavily in branding, marketing, and storytelling, creating emotional connections with their clientele and enhancing perceived value. Moreover, these brands prioritise quality, craftsmanship, and unique design, offering superior products that justify their higher price points.

Nevertheless, with the average monthly salary in France ranging between 3,000 and 3,500 euros gross, acquiring a luxury item such as a Chanel bag remains within reach for only a select few.