Inflation and handmade construction drive up prices

Her Chanel pricing policy explained the CEO of the luxury brand, Leena Nairafter raising the cost of one of its most famous bags to more than 10,000 euros ($10,725).

The well-known fashion house, known for perfumes, cosmetics and haute couture, “takes into account both inflation and its high demands on materials and craftsmanship in pricing,” said Ms. Nair, who took over the reins of Chanel in January 2022, in an interview he gave to Bloomberg.

“We use excellent raw materials and our production is very strict, painstaking, handmade, so we raise our prices according to the inflation we see,” he said.

Many luxury brands such as Chanel have been in trouble in recent years due to rising prices of their often coveted products. Taking center stage this time was a classic medium-sized Chanel bag that broke the €10,000 mark for the first time in Paris last month.

Chanel tends to cater to more affluent customers, on a par with Hermes International SCA, watchmaker Rolex and other luxury brands.

Nair also added that the brand, founded more than a century ago by Coco Chanel, is pursuing “rational and modest growth” as it focuses on maintaining the quality of its products in the long term.

He reiterated that the company does not intend to conduct an initial public offering. Chanel is owned by billionaire brothers Alain and Gerard Wertheimer, whose fortunes are estimated at $50 billion each, according to the Bloomberg Billionaires Index.

Finally, it is recalled that the company’s revenue increased by 17% to 17.2 billion dollars in 2022.