By Alice Seeley
Louis Vuitton, LVMH’s top fashion brand, raised prices on many of its luxury goods on Wednesday, Feb.15, due to increased manufacturing and transportation costs, an LVMH spokesperson told Reuters.
Louis Vuitton, the world’s biggest luxury brand, joins other companies, such as Chanel, in increasing prices this year to protect its margins from rising inflation.
Surprisingly, the increased prices are not due to the pandemic. LVMH had a record year in 2021, reporting a revenue of $71.5 billion. Many consumers stuck at home with extra cash during the pandemic used that money on luxury goods such as a Louis Vuitton purse.
The price increases will hit Louis Vuitton stores worldwide, although the scale of the rises will vary depending on the product. Higher-end purses will increase in price by about 20%, while lower-end purses are predicted to increase by at least 4%.
“The price adjustment takes into account changes in production costs, raw materials, transportation as well as inflation,” an LVMH spokesperson said.
In January 2022, chairman Bernard Arnault said that the company “has enough wiggle room to raise prices.” He cautioned that management has to “remain reasonable” when it comes to boosting the prices of the group’s offerings in the year ahead.
The news of price hikes occurred a couple of days after 5% of Louis Vuitton employees walked out of several factories on Feb. 10, demanding higher wages and protesting the change of working hours. Louis Vuitton did not address whether these walkouts impacted its rising “production costs.” In response to the walkout, Louis Vuitton stated that it pays its employees an average salary of $170 per month and shorter shifts.
After the announcement of the price increases, LVMH stock prices went up 3.58% on Tuesday, hitting an end-of-close high of $694.
