In the world of luxury fashion, Chanel is one of the most interested and most coveted names to own. The biggest merit is the late genius Karl Lagerfeld , who successfully revived the brand and made Chanel a prestigious name of French fashion.
As the Haute Couture brand that can be considered the largest in Paris when it regularly attends major fashion weeks, owns craft workshops, annual income is about tens of billions of dollars… Chanel has enough potential to get closer. The world of Hermès is more and far more than that of Louis Vuitton or Gucci , says Charles Gorra, CEO of Rebag.
Chanel and hermès, which side will the balance tilt?
In the context of a gloomy pandemic cloud covering the fashion industry, Chanel’s revenue also declined when 2020 fell 18% compared to the previous year but quickly recovered with revenue of $ 13.2 billion in 2021. Such a difficult period, but Chanel still aggressively increased the price four times for two classic models, Classic Flap and 2.55. Specifically, the current price for a medium-sized Chanel Flap is 7,800 euros, only 100 euros cheaper than the Hermès Birkin 30 Togo calfskin bag.
Next, Chanel also introduced shopping limits by region. In Paris, each customer can only buy one bag at a time, and can only buy once every two months without having to buy the same model. In New York there is also a limited number of classic models. In Korea, each customer can only buy one classic bag a year.
The above two movements clearly increase the value of the bags as well as increase the desire to own Chanel bags of fashion people. Chanel’s position has not only increased in the mainstream market but also in the “gray market” resell market. But is that enough for Chanel to get closer to Hermès?
Basically, Hermès is a nearly 200-year-old brand known for leather goods while Chanel is a strong fashion brand. If Chanel is proud of Lesage, Maison Desrues, Maison Massaro, Maison Michel or Lemarié ateliers but does not have a leather bag atelier, Hermès is proud of 19 leather goods ateliers, including Sacs and recently. is the Maroquinerie de Guyenne, home to classic handcrafted leather bags with each story of their own making (e.g. the Kelly Bag is handcrafted from 36 pieces of leather and 20 hours in the making).
Two monuments to Hermès, Birkin and Kelly, are associated with two iconic women, Jane Birkin and Grace Kelly . The names of these two bags alone are associated with classic values and status. The variety of colors as well as leather materials, including rare leather types, contributes to affirming the value of the bag. Meanwhile, Chanel has stopped using exotic leather since 2018.
To move up the ladder in the luxury world, Chanel needed to turn her classic bags into a true investment, as reflected in the prices they sold at prestigious auctions like Sotheby’s or Christie’s. , or right on the resell market. For example, at Vestiaire Collective, a rare Birkin set a record for 112,000 euros while a Chanel bag sold for the highest price at just 30,000. Bertrand Peyrat, CSO of Vertiaire Collective said: “Chanel can raise the price 2.55 and Timeless is close to Birkin or Kelly, but the valuation in the second market is not yet there.”
It is easy to see the move to increase prices and limit the number of bags sold with the purpose of increasing the desire to own as well as the value of Chanel bags. At the same time, it’s also a more effective branding move than antagonistic, as Erwan Rambourg, HSBC’s global head of retail and consumer research, says. Indeed it is. People suddenly talk more about Chanel, as well as talk about the ambition to become a rival of Hermès, although there is no official statement from the brand. But you know what…
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