Part 1: Brexit..and Bags.
Part 2: Buying Bags After Brexit
Part 3: Brexit and the Asian Market
Part 4: UK – Cheapest Prices for Luxury Shopping
Back in March of 2016, we reported that Chanel increased it’s UK prices for the first time since the company’s global price harmonization effort in April 2015 (Read: Chanel Increases Prices in the UK). At the time, Classic prices were bumped up around 10% to bring them more in line with the US and Japan.
But that was pre-Brexit. As you may remember, on June 23 the citizens of the UK voted to formally withdraw from the European Union. Equity and currency markets swung wildly, and while stock markets have stabilized and in some cases hit pre-Brexit highs again (e.g. USA), the massive exchange rate adjustments seem to have solidified. The UK pound is still only slightly higher against the dollar than the historic lows it hit in the wake of Brexit.
We can report that sometime in July, for the second time this year, Chanel has increased UK prices. Classics are now 5-7% more expensive. Before the increase, the Medium Classic Flap was £3,380 – now, it’s £3,620.
| Style | Before March 2016 | March 2016 Increase | Initial Amount Increase | July 2016 Increase after Brexit | Amount Increase from March |
| Chanel Medium Classic Flap Bag | £3,075 | £3,380 | + £305 | £3,620 | + £240 |
| Chanel Jumbo Classic Flap Bag | £3,425 | £3,760 | + £335 | £3,980 | + £220 |
| Style | Before March 2016 | March 2016 Increase | Initial Amount Increase | July 2016 Increase after Brexit | Amount Increase from March |
| Chanel Medium Classic Flap Bag | £3,075 | £3,380 | + £305 | £3,620 | + £240 |
| Chanel Jumbo Classic Flap Bag | £3,425 | £3,760 | + £335 | £3,980 | + £220 |
Total Price Increase in 2016:
Chanel Medium Classic Flap (£3,075 to £3,620) = + £545. Overall, a 15% increase this year alone.
Chanel Jumbo Classic Flap (£3,425 to £3,980) = + £555. Overall, a 14% increase this year alone.
The Road to Price Harmonization
The weakness of the UK pound against other major currencies made the country very attractive for tourist spending (Read: Part 3: Brexit and the Asian Market); for the past 3-4 months, the UK was THE cheapest country in the world to buy luxury (Read: Part 4 – UK: Cheapest Prices for Luxury Shopping).
But, the party seems to be winding down.
The price increase means that tourists will not find incredible savings on Chanel in the UK. Let’s compare the USD Equivalent to each price change to get a better sense of Chanel’s plan for global price harmonization.
Current Chanel Prices in the US
| Style | Price in the US |
| Chanel Medium Classic Flap | $4,900 |
| Chanel Jumbo Classic Flap | $5,500 |
Currency Legend
| Currency | Pre-Brexit | Post-Brexit |
| 1 GBP (£) | $1.47 | $1.31 |
*Pre-Brexit exchange rates refer to June 22nd. Post-Brexit are based on today’s current conversion rates. Given the volatility of the pound and euro, values may be subject to change.
| Style | UK Pre-March Price | USD Equivalent | UK March Price after Increase | USD Equivalent | UK July Price after Increase | USD Equivalent |
| Chanel Medium Classic Flap | £3,075 | $4,365 | £3,380 | $4,798 | £3,620 | $4,755 |
| Chanel Jumbo Classic Flap | £3,425 | $4,498 | £3,760 | $4,938 | £3,980 | $5,227 |
| Style | UK Pre-March Price | USD Equivalent | UK March Price after Increase | USD Equivalent | UK July Price after Increase | USD Equivalent |
| Chanel Medium Classic Flap | £3,075 | $4,365 | £3,380 | $4,798 | £3,620 | $4,755 |
| Chanel Jumbo Classic Flap | £3,425 | $4,498 | £3,760 | $4,938 | £3,980 | $5,227 |
*USD Equivalents are based on the currency exchange rates of that specific month
Handbag Math
US Shoppers will not save a significant amount of money buying Chanel bags in the UK at this point. Buying a Chanel bag in the UK versus the US will still be somewhat cheaper though combined with the savings of the VAT refund (Read: Chapter 6 – How It Works: VAT Refund and Custom Duties).
- If a US shopper bought a Chanel Medium Classic Flap Bag in the UK BEFORE the March price increase, they would’ve save $535 + VAT refund
- If a US shopper bought a Chanel Medium Classic Flap Bag in the UK AFTER the March price increase, they would’ve save $102 + VAT refund
- If a US shopper bought a Chanel Medium Classic Flap Bag currently in the UK AFTER the July price increase, they would save $145 + VAT refund simply due to the weaker pound because of Brexit
Example of VAT Refund
Chanel Medium Classic Flap
| Region | Chanel Classic Flap |
| USA | $4,900 |
| UK | £3,620 |
| VAT Refund (approx. 10%) | - £362 |
| Cost after VAT | £3,258 |
| USD Equivalent | $4,279 |
| Overall Savings | $621 |
*Custom duties are not taken into account in this example above. Custom duties may decrease the amount of overall savings.
Future Price Increases?
The latest July price increase shouldn’t come as a big surprise. Chanel has been at the forefront of the luxury market trend towards global price harmonization (many think this effort was made in anticipation of a dramatic expansion of their e-commerce business) and the currency swings after Brexit wrecked their strategy. Most brands were probably waiting for the markets to cool down before adjusting prices, but we should see Chanel’s move as one of the first of many more to come.
Let us know your thoughts and personal experience on the BopTalk threads. Also share what you’ve bought post-Brexit by tagging @pursebop with hashtag #pursebopBBB (Buying Bags after Brexit ).
Read related articles below:
Part 1: Brexit…and Bags.
Part 2: Buying Bags After Brexit
Part 3: Brexit and the Asian Market
Part 4: UK – Cheapest Prices for Luxury Shopping
Chanel Increases Prices in the UK
Hermes Increases Prices in Europe
Chanel Adopts New Pricing Scheme
Global Price Implications on Chanel Street
“Why are people waiting outside Chanel doors?”
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Updated: June 5th, 2017
Comments
2 Responses to “Chanel Increases Prices to Compensate for Brexit”
Prices of new Chanel bags vary across countries. You should check out this site that compares prices of Chanel bags globally: http://www.designerbagprices.com; I found it quite useful.
How can prices just keep going up on such a regular basis??