Chanel’s customers in Europe and Asia are about to get either some good or bad news. The French luxury company will align the prices of three of its most popular bags—the 11.12, the 2.55, and the Boy Bag—across global markets. The changes are set to take effect on April 8.
That means prices will go up 20% in Europe and come down about 20% in China for both the 11.12 bag and the Boy bag, according to the figures reported by WWD (paywall). The 11.12 bag, for instance, would increase in Europe to €4,260 ($4,512) from its current price of €3,550. In China, it would fall to 30,000 yuan ($4,802), from 38,200 yuan. The new prices of the classic 2.55 bag were not reported. Chanel said it intends to align the prices of the rest of its products by the end of the year.
Quartz has reached out to Chanel for comment and will update this post with any response.
The new pricing structure simplifies things for a company with a global customer base. Right now, the same products are significantly more expensive in Asia than in Europe. At the current exchange rate of about 0.15 euros to the yuan, the price tag on the 11.12 bag is about 60% higher in China. The revised price would bring the cost of the bag in China down to only about 5% higher than in Europe.
The move also protects Chanel’s brand. Price is an important part of its identity—as it is for all luxury goods—so big differentials between countries can be problematic. Chanel’s president of fashion, Bruno Pavlovsky, told WWD that aligning the prices ensures that customers are “seduced by the brand and by the products and not just led by these price differentials.”
This year’s volatile currency fluctuations have also been a headache for brands such as Chanel, which have to contend with counterfeiters. At times, prices for its products have been twice as high in Asia as in Europe, and Pavlovsky says this price roller coaster has led to a “huge increase in the parallel market, mainly in China and Southeast Asia.” The shifting prices can make it difficult for customers to tell real products from knock-offs. A steeply discounted but genuine bag sold in Asia may seem like a fake, diluting Chanel’s brand cachet.
To address these currency swings, Chanel says it will try to keep its international prices within 10% of a product’s euro benchmark price.
Europeans may not be excited about the change, but Chinese Chanel-lovers will be. It could mean more shopping at home, rather than waiting for a European tour to go on a luxury binge.