'%20x='0'%20y='0'%20height='100%25'%20width='100%25'%20%0A%20%20%20%20%20%20%20%20%20%20xlink%3Ahref='data:image/jpg;base64,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'%3E%3C/image%3E%3C/svg%3E)
LVMH-owned top fashion brand Louis Vuitton recently made an announcement about raising their product prices.
The brand took this action in response to increased manufacturing costs and global inflation. The decision will influence the cost of its handbags, leather goods, accessories, and fragrances across the globe.
In view of the COVID-19 pandemic, eminent fashion houses like Hermès and Chanel have taken similar decisions in the past. By doing so, the brands safeguarded their profit margins against inflation. The French fashion label was the first to make such a declaration in 2022.
All about Louis Vuitton’s price increase in 2022
In a conversation with Reuters, a spokesperson from Louis Vuitton, China, cited the reasons behind such a decision:
“The price adjustment takes into account changes in production costs, raw materials, transportation as well as inflation”
Subsequent to the latest announcement made by the brand, the stock price of its parent company, LVMH, rose by 3.58% on the same day of its declaration.
The year 2020 brought everything to a standstill as it forced companies to halt their production, which subsequently led to worldwide delays. These disruptions continue to have a negative impact on the supply chain systems of the world.
Moreover, consumers were stuck at home during lockdown, which further reduced their spending on travel and services. The money that consumers saved could then be used to purchase luxury goods and long-term investment pieces, such as a Louis Vuitton leather bag.
In 2021, LVMH created a record with a revenue of $71.5 billion (which was 44% more than that of 2020). The reported fourth-quarter revenue for 2021, primarily in fashion and leather goods, was directly responsible for a 42% raise in the company’s annual earnings.
LVMH’s chairman, Bernard Arnault, was optimistic about the fashion label’s potential to react to inflation. At the annual earnings press conference, the chairman said:
“Everyone is talking about inflation [...] I don’t expect such an economic crisis. We have just gone through two very challenging years. I’d rather think that things will continue to improve, but we have an advantage on quite a few other groups which is that we have a degree of flexibility on our prices. So in the face of inflation, we have the ways and means to react. And, I believe that demand will remain strong for our products,”
As per Bloomberg’s report, LVMH-owned label Tag Heuer also intends to increase prices in April.
