The price increase in Gucci handbags follows a report by a Jefferies luxury goods analyst.
In an effort to shake off and endure the impact of the COVID-19 pandemic, Gucci has raised the price of handbags by up to 9%, joining rivals Louis Vuitton and Chanel in hopes that their brands will continue attracting the affluent.
The economies of Italy and France greatly relies on the luxury fashion industry, which has been hit hard by lockdowns due to the pandemic, forcing the closure of stores all over the world. This will undoubtedly result in years of uncertainty as sales and incomes are likely to plummet.
Jefferies luxury goods analyst Flavio Cereda compared prices in different countries of two Gucci handbags – the $2,290 Dionysus and the $2,980 Zumi – in May and June, and found price increases for both in Italy, Britain, and China of between 5% and 9%.
Cereda said in a report that the price change would narrow the gap between handbag prices in Europe, which are lower than in major luxury markets such as China, where shoppers have overloaded stores ever since their lockdown was lifted. The price in euros of the Dionysis in China was still 28% higher than in Italy after the increase. According to Cereda’s data, the gap stood at 23% for the Zumi.
“We are unsurprised that Gucci, another brand with strong brand heat, is following suit with opportunistic price increases in an attempt to mitigate revenue contraction,” said Cereda.
Back in May, Chanel increased its handbags and some small leather goods worldwide to reflect the higher raw materials costs due to the supply chain being disrupted during the height of the COVID-19 pandemic.
A Reuters review of online prices of handbags by Louis Vuitton also found increases in Europe and the United States.
A Kering spokeswoman has declined to comment on this recent finding on Gucci.