Specialized in manufacturing T-shirts for 21 years

faster, higher, stronger: luxury pricing goes for gold

by:Teesso     2019-08-05
PARIS (Reuters)-
If, like the French fashion company Balmain, you can sell a torn cotton T-shirt
Shirt over € 1,000, you may want to know if there is any price for your well
High-tech customers do not pay.
This is an issue that the luxury industry has been asking for years as it skips the financial crisis of diamond slingshot --
Borgezie\'s house, 120,000 euros ($148,000).
\"There is a trend in the highest population --
The final buyer forgets the cost.
They want the best.
What they want, \"said Michelle Chevalier, author of luxury brand management.
The most expensive brand known as \"absolute\" luxury
These include Hermes, Van Gogh and Bottega Veneta-
Because of demand from emerging markets, especially from China, this growth rate is the fastest.
According to Bain research, the \"absolute\" segment has grown by 6% per year since 2000, surpassing the general luxury market.
Currently, it has a 40 billion euro share of the 191 billion euro luxury market, and is expected to grow faster than other segments by 2014.
\"The supply of these products is limited,\" said Thomas Chauvet, a luxury analyst at Citigroup, from a small area of France with prestigious and retro cognac and champagne.
\"This is a great opportunity to raise prices.
Analysts said prices in the luxury goods industry rose sharply from 2001 to 2011 and will remain higher than overall prices.
Thomas Mesmin of Cheuvreux estimates that the price of fashion and leather products rose by 62% during this period, while the price of watches and jewelry rose by 78%.
In the past 11 years, the inflation rate in the euro area has been only 26%.
Most of the rise in luxury prices came before the 2008 crisis, but prices have risen again since the second half of 2010.
According to Cheuvreux, luxury prices rose by 7% in 2011.
Prices of champagne, leather goods, jewelry, etc. have been particularly high over the past two years.
The Hermes Cape Cod Watch, which sold for 1,300 euros in 2009, now costs 2,200.
A bottle of moorita and Dutton Empire Rosse, which were sold in the United States for $60 in 2010, can now sell for $75. 99.
LVMH, the world\'s largest luxury brand, is especially confident, raising the price of Louis Vuitton
In 2011, the prestige champagne range reached a maximum of 15% models.
Mr. Chauvet said LVMH\'s rise in systemic prices accounted for the third increase in revenue.
An analyst pointed out that LVMH worries about the purchase price of Louis Vuitton bags every year because they know that too high will alienate some customers, but too low will lower the price of the brand.
Analysts said: \"The price of Louis Vuitton is distressing . \"
\"I was told that this was the most important decision they made throughout the year.
\"This pricing strategy is in sharp contrast to lower prices.
Brands like Gap offer big discounts to attract bottom hunters and keep revenue growing.
\"The price of top luxury goods will be higher, while the mid-range
Brunello Cucinelli, a cashmere expert, told Reuters he launched the company of the same name in June.
If leather and crocodile prices rise in 2012 due to the current drought affecting the United States, these prices may rise moreS.
In the Midwest, just as bad weather in Australia pushed up skin prices in 2011.
In fact, the rise in commodity prices may only be a small factor in the price increase.
The best brands including Louis Vuitton, many champagne shops, Hermes and Chanel perfume have a operating profit margin of 40-
The 50% and gross margin are well above 60%, so they can comfortably absorb the cost increase if they want.
On the contrary, as more luxury companies withdraw their products from department stores and build their own flagship stores, their retail profits may increase.
5 times the wholesale price.
They can then also protect their brand from the dirty business of regular discounted sales.
\"No one wants to buy something rare and expensive, and after three months it\'s only sold half,\" said Fflur Roberts, head of luxury at Euromonitor . \".
\"This does not give rise to respect for the brand.
Luxury goods are about perception.
\"The problem many luxury retailers are facing now is how fast prices are rising, especially in emerging markets like China, where prices are already 50% higher than in Europe due to taxes and import taxes.
This gap is unsustainable, and if Chinese consumers also make up about third of French store sales, it could dampen growth in China\'s luxury market, they began to feel cheated in their own market.
The answer does not seem to be to limit overseas prices, but to lower domestic prices.
As a result, Chauvet said LVMH may raise prices in Europe by 10% this fall to rebalance China\'s premium. ($1 = 0. 8124 euros)
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