When Gucci owners Kering (PRTP.PA) and Hermes report earnings this week, investors are willing to pay higher price tags for designer accessories, a big luxury fashion investor. Look for signs of the group.
The world’s largest luxury brand, rival Louis Vuitton (LVMH.PA), announced on Tuesday that it will raise prices globally from February 16 due to high manufacturing and shipping costs.read more
Pricing power could once again emerge as a major driver of revenue growth in 2022 for top tiers in the fashion and leather products industry, following a series of price increases in 2021 and 2020.
After months of being stuck at home, consumers have escaped from the blockade eager to spend cash on luxury fashion and accessories. Brands are leveraging their purchasing power to make their products even more expensive and exclusive.
Bloggers on China’s social media platform Xiaohongshu are predicting higher prices from Kering’s profit engine Gucci from Friday. Gucci’s small Marmont shoulder bag is currently priced at 16,500 yuan ($ 2,602), up about 3%, while other Gucci accessories could rise 10-15%.
Users of the Xiaohongshu site, known in the industry as the Little Red Book, often cite fashion label salespeople and have a proven track record of correctly predicting price increases, but they do not necessarily identify the source. ..
According to the Xiaohongshu site, Kering’s Balenciaga has already raised prices in early January in China. For example, the cost of winding hourglass handbags for small and very small labels increased by 3.5-4% to 17,500 yuan and 11,550 yuan, respectively.
Kering declined to comment, noting that he was in a closed period prior to Thursday’s annual income.
Hermès told Reuters that it is likely to address pricing issues when reporting revenue on Friday, denying analysts’ reports that the company had already raised prices by 3% to 10% last month.
Chanel raised the price of some of its most popular handbags three times last year. The price of that little classic handbag is now around $ 8,200, 60% higher than in 2019.
“This year is likely to create a virtuous cycle of pricing power and brand desirability,” UBS said in a note to its customers.
Kering is expected to report 20% intrinsic sales growth in the fourth quarter, and HSBC forecasts with the help of marketing investments that have been talked about over Gucci’s 100th anniversary last year.
According to HSBC, Hermès sales are expected to increase by 12% at constant exchange rates.
http://www.gulf-times.com/story/709975/Will-Kering-and-Hermes-follow-Louis-Vuitton-s-lead Will Kering and Hermes follow Louis Vuitton’s price lead?