Louis Vuitton Announces Global Price Increase Due to Supply Chain Shortages
Due to changes in production costs and inflation.
Louis Vuitton, arguably French luxury conglomerate LVMH‘s top fashion brand, has announced that it will be raising its prices around the globe later this week. The decision to do so comes at a time when most companies are struggling with the current global supply chain issue.
Louis Vuitton is citing increased manufacturing costs as well as global inflation as the core reason as to why its leather goods, accessories and fragrances will see a more expensive price tag soon. In a statement to Reuters Louis Vuitton commented on the matter, “The price adjustment takes into account changes in production costs, raw materials, transportation as well as inflation.” Louis Vuitton appears to be following the footsteps of its French luxury competitors including Hermès and Chanel. In late December last year, Chanel announced that it would hike up the prices of its most classic handbags by at least 60%.
COVID-19 has forced companies to halt or minimize production for a large part of 2020. It led to delays worldwide and unprecedented supply chain disruptions on a global scale. While that is the case, Louis Vuitton still reported record revenue for 2021, hitting $71.1 billion USD, a 40% increase from its numbers in 2020. Forbes reported that in an earnings call last month, LVMH CEO Bernard Arnault commented on the price increases expected this year sharing at the very least, “We have to remain reasonable.” The announcement of the price rising saw LVMH’s stock prices go up 3.58% on Tuesday, closing at a high of $694 USD at the end of the day.
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