So is this just a natural by-product of buying luxury goods, or are consumers getting tired of it and turning to the second hand market; and are consumers fed up of paying a premium to get their hands on sought after pieces through the pre loved market, as they get bought up and sold on for above the RRP?
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Price Increases and Selling above RRP
25 February 2021
Why do fashion houses increase their prices so often and by so much, and are consumers tired of it? Plus, are consumers fed up of resellers selling sought after pieces for more than RRP, or are consumers actually to blame?
As consumers of these high fashion goods, do we just readily accept these price increases, or are we actually getting tired of saving up for our next piece, only to realise that the price has just increased by another £100?
Another point to touch on that goes hand in hand with the price increases is how fashion houses make specific pieces more difficult to get hold of by reducing supply and therefore increasing the market price of the product. A recent example of this is the Louis Vuitton Key Pouch, which peaked in popularity recently and was sold out for a long time. At the time the pre loved market was inundated with these pieces being offered at substantially more than the retail price (the RRP was £145). Louis Vuitton clearly spotted that this was occuring and boosted their supply, but also increased their price to £175. Similarly with the Multi Pochette Accessoires, the bag was priced at £1,350 and was completely sold out ... we could see them selling in the pre loved market for up to £2000! Louis Vuitton obviously watch these trends, understand what is happening and then react by increasing supply, and also the price. The Multi Pochette now retails for £1,500 and is readily available at LV online.
My Cles in 2017 cost me 'just' £125!
If you're patient then pieces become less sought after and begin to appear on the websites of the first line retail outlets again ... so is it actually the consumers fault for falling for the hype, over-buying and raising the demand so that prices get increased? Are consumers to blame because they want to get their hands on the new 'it' bag so badly that they are willing to pay £500 more than retail to own it whilst it's such a hot piece?
Should the focus therefore be placed more on classic, timeless pieces to invest in where the resale value is lower than the RRP, but due to regular price increases and standard inflation rates it means that these pieces can easily be sold on again in the future for a profit.
Take a Vintage Chanel Maxi/Jumbo for instance; the RRP of one of these bags new in 2021 would be £6510; however I purchased my vintage piece in 2016 for £2000, when a new one from the store would have cost me £4380 ... and now a vintage Chanel Maxi the same as mine would sell for around £3,200.
In comparison, a long standing bag crush of mine; the Louis Vuitton Palm Springs Mini Backpack (PSM) was previously retailing for £1,360. At the time of release it was over hyped by influencers and it sold out so rapidly that Louis Vuitton introduced a waiting list for the bag. At the same time the resale market was slowly becoming flooded with brand new PSM's selling for up to £2000! If we compare this to now, where the hype has died down and focus has shifted to other 'it' bags, they are readily available on the LV website again, however now you can pick one up for £1,490 (or £1,520 for the reverse), and the resale market has become stangnant with their sales, unless they are offered for less than retail.
This means that anybody that purchased one of these bags at the RRP with a view to sell for a profit will find that they are now actually going to make a loss ... and this will remain the case for the forseeable future as new 'it' bags are regularly released.
That's not to say that they will never again sell for above retail, though. Recently we saw the Fendi Baguette and the Dior Saddle bag from the late 90's rapidly become popular again after being worn by influencers ... however these bags took around 20 years to see a second spike in popularity, and as soon as the first line retailers get wind of one of their vintage pieces drawing this sort of attention they will react by quickly creating a 'reissue' ... an updated version of the vintage hyped piece ... which rapidly becomes the next 'it' bag and the vintage piece, although still performs well at resale, does not perform as well, or sell for as much as the re-issued piece.
It's all incredibly interesting (albeit often infuriating) to see the trends of pieces fluctuate and watch how customers, first line retailers and resellers react. On one hand it seems very unfair that pieces become over-hyped and prices get increased, meaning that consumers suffer. However, if retailers see the popularity of pieces increasing, they are inevitably going to react in a way that generates more profit for themselves ... they are profit-making companies, after all! This inevitably also has a knock-on affect with the prices we see in the resale market as the two are closely intertwined, and what happens with one, will always affect the other.
Let us know down below in the comments section what your thoughts are about this topic as a whole? Also let us know whether you've fallen for the hype and payed above retail, or whether you wait for the hype to die down before making a purchase, or alternatively if you stick to only buying classic and timeless pieces, rather than seasonal styles?
We love to read your thoughts and ideas ...
Pictures via nicolajanecouture.com, vogue.com, louisvuitton.com/eng-gb and chanel.com/gb
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