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China luxury shock: Louis Vuitton to raise prices up to 20 per cent

(Source: Reuters/Marco Bello)

LVMH’s top fashion brand Louis Vuitton is expected to increase prices in China by as much as 20 per cent, as luxury labels bank on a strong rebound of Chinese demand following the easing of Covid-19 lockdowns.

Louis Vuitton, the world’s biggest luxury brand, last February led the way to a string of price hikes from some of the industry’s biggest names.

Riding a wave of soaring demand fuelled by shoppers drawing on savings from pandemic lockdowns, high-end labels have been raising prices over the past few years, with Birkin bag maker Hermes flagging plans to hike prices by 5 per cent to 10 per cent this year, to cope with rising costs and currency fluctuations.

Bloggers on China’s social media platform Xiaohongshu are forecasting price increases at Louis Vuitton of between 8 per cent and 20 per cent on February 18, and chatter has focused on lines forming outside of stores in Shanghai, for example, seen as a sign shoppers are seeking to make purchases before any increase.

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.

LVMH executives last month signalled limited price hikes, mainly for leather goods, to reduce price gaps between the US and Europe.

“From time to time we have the possibility of doing it,” LVMH chief financial officer Jean-Jacques Guiony told reporters at a company results presentation last month, noting executives have a prudent approach to price hikes and seek to avoid multiple increases.

Louis Vuitton, which sells a popular tote bag called Neverfull for US$1609.35, raised prices in France by around 3 per cent to 7 per cent this month, according to the website PurseBop.

The website, which tracks the luxury market, cited models of the top-handle Capucines bag that went up to $5,910 from $5,540 and a Pochette Accessories purse that rose to $1218 from $1052.

LVMH and Louis Vuitton did not immediately reply to a request for comment.

  • Reporting by Brenda Goh, Sophie Yu and Mimosa Spencer. Editing by Jane Merriman, of Reuters.

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