Chanel’s medium flap bag has set a new record as it becomes the first bag to cost over 10,000 euros. Chanel’s CEO, Leena Nair, defended the price increase to Bloomberg, citing inflation, premium materials, and craftsmanship as the reasons behind it.
Chanel’s CEO justifying price increase
However, despite the brand’s commitment to quality, some controversy has surrounded the bag’s ever-growing price tag, with some critics suggesting the price hike is excessive. Chanel claims the price adjustment is based on cost price, with raw materials and production costs subject to constant inflation.
Luxury brands often exert pricing power by cultivating an exclusive aura and attracting affluent consumers. They also prioritize quality, storytelling, and branding in their product strategy. Nonetheless, the average monthly salary in France is not sufficient to buy such a luxury item, making it unaffordable for the majority.
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