Monday, June 17, 2024

“Chanel” and “Cartier” .. The rich are dying, but their preferences are not dying

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As the virus has impoverished millions of restaurant workers, miners and workers at sea and underground, it has become an opportunity for a few luxury brand owners. Their pleasure.

Why not?

Luxury brands such as “Louis Vuitton”, “Gucci” and “Cartier” were not affected by the effects of the Covit-19 and the rise in inflation after raising their prices, according to a report in the French News Agency. To increase their profits.

It is not only in this way, in addition to previous news, that the world economy has recovered from last year’s epidemic, but as raw material and energy prices have risen, the recovery has been accompanied by high inflation. It is natural for the word “raw materials” to be added to the dough in a very short way, but the basis here is still associated with “luxury goods” because their manufacturers can easily respond to the virus by raising their prices. Products, which attracts more of their customers.

In a related statement, Bernard Arnold, CEO of LVMH Group, told reporters: “We have some advantage over price flexibility over many companies and other groups, for example, we have the means to deal with it. Inflation. “

According to analysts at Swiss bank UBS, top brands such as Louis Vuitton, the industry’s leading group LVMH, have raised prices two and a half times over the past 20 years.

Bank analysts said in a research note that “energy prices are a major factor influencing the luxury sector”.

But LVM. Ash achieved record sales of 64 billion euros and 12 billion euros in net profit last year, both figures higher than pre-epidemic levels.

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Of course, the French team has a wide range of spirits, perfumes, jewelry and cosmetics.

It’s about L. At. Mom. The group announced last week that Kering, which owns the Gucci and Yves Saint Laurent brands, had reached pre-Kovit levels to record a profit of 2 3.2 billion on sales of .6 17.6 billion.

Francois-Henri Pinault, CEO of the group, agreed, “For each new season, we design a new collection and review all pricing tables.”

Hermes made a profit of 2.4 billion euros on sales of nine billion euros.

Axel Dumas, president of Hermes, said his brand, which has “very strong demand”, raises its prices once a year. “All our products have the same margins. We do not handle our prices. It’s related to production costs, not picks.”

He pointed out that the craftsmanship required to make “Erms” bags could be “less affected by the high cost of energy and raw materials than others”.

According to the Swiss “Richmond” group, which owns the “Cartier” jewelry, sets its fiscal year from April to March, announcing sales of 5.6 billion euros in the fourth quarter alone, an increase of 38% over the same period. Of the year. 2019.

Analysts at the British global bank, HSBC, backed the earlier report, saying that “in some cases, demand exceeds supply, which means consumers will sell their own goods in favor of buying more expensive ones, and accept higher prices.

Rolex, a luxury watch maker, for example, has been largely avoiding price hikes for the past two years. But at the beginning of 2022, it raised prices by more than 3 percent, “and prices of some models increased by 12 percent.”

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Focused on the “channel” for “significantly raising the prices of its popular bags during the epidemic, and finally”.

“While not every luxury brand can use this double-edged sword, we believe the channel’s price moves have created a good place for the likes of Louis Vuitton, Herms and Gucci to further raise their prices,” they added.

In November, Payne & Company predicts that the luxury sector will grow by 6 to 8 percent annually and will reach 360 to 380 billion euros by 2025.

But Arno Kadar, director of the Flornoy Fund, warned that a significant increase in prices would negatively affect sales. “There are limits,” he said. Raising the price of a suitcase from 1,000 to 1,200 euros overnight will reduce demand.

In short, the virus killed humanity, but it did not use the Rolex watch, and the richest people in the world were killed by the virus, but the virus did not come close to their luxury goods, and the sum of the results:

The rich die, but their preferences never die

Nadia Barnett
Nadia Barnett
"Award-winning beer geek. Extreme coffeeaholic. Introvert. Avid travel specialist. Hipster-friendly communicator."

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