The rise of Chanel prices

31 May 2016

A Chanel bag is the one item that's at the top of every fashion girl's wishlist. It's often described as a timeless classic piece and falls in the same category as the LBD, the classic Burberry trenchcoat and black Louboutin heels. Another term that quite adequately describes a Chanel Classic Flap bag is 'investment piece'. And while the word investment is thrown around a lot to justify the purchases we make, it seems like a 2.55 is one of the rare accessories that lives up to the nickname. 

Back in 1955
Chanel prices for the Classic Flap bag increase at an average 15% percent per year. Which means that the bag you bought three years ago is now worth a lot more than its original retail price. But the best bargains were made in 1955, when the 2.55 was priced at just €199! In 2016, the price for a medium Classic Flap is a staggering €4260. Let's investigate how and why Chanel prices have increased this much. 

The original 2.55 is similar in size to a medium Classic Flap. We'll therefore use these two types of Chanel bags to analyze the increase of prices. The currency will be American dollars because of the lack of information concerning price increases in euro's.


Inflation or ...?
one of the biggest increases was in 2011, when the price went up with almost 37%. In 2014 the price of a Chanel Classic Flap in medium was $3900, almost twice the price of the same bag in 2008. Ofcourse these increases have partly to do with inflation. Today, everything is more expensive than it was a few decades ago. Everything from production costs to the price of materials has significantly risen. but even if we take inflation into consideration, it's pretty clear that the French fashion house alters their prices well beyond the annual inflation rate. 

The reason behind these increases
A spokesperson from Chanel released the following statement: "Like all major luxury brands, we regularly adjust our prices in line with changes to our models, production costs, the price of raw materials and exchange rate fluctuations." While this partly expains the rise in prices, another (more reasonable) explanation came from adjunct associate professor Thomai Serdai (New York University), who is an expert on luxury goods. She revealed to Racked that brands increase prices for two reasons: exclusivity and profit. As Chanel has added more affordable products in its collection, like small leather goods and footwear, it needs to maintain their high profits and keep a sense of exclusivity. Producing an almost $5000 bag is certainly a way to achieve this.

Investment piece
When only assessing the rise in prices , one could argue that a Chanel bag might be a better investment than the stock market. But just like a newly bought car, if you carry your 2.55 every day for years and years, your beloved Chanel piece will decrease in price. But with the Chanel prices rising on the levels they currently do, a well-loved vintage Chanel piece can still be worth more than its original retail price. So go ahead and invest in yours on Designer-Vintage!