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| A woman wearing a Chanel bag / Korea Times file |
By Yoon Ja-young
People are lining up in front of Chanel stores upon rumors that there will be price hikes next month. Luxury brands, including Chanel, have usually raised prices steeply after such rumors ― which is suspected to be one of their business tactics.
The number of people lining up in front of the Chanel store within Lotte Department Store in downtown Seoul on Monday morning appeared to be as twice as long as usual, according to Yonhap news agency. A department store staff member reported that the line was long enough to surround the building.
The rush follows rumors that Chanel Korea will raise the prices of its major items by up to 12 percent next month. Chanel does not officially confirm whether there will be a price hike, but numerous postings can be found about Chanel's planned price hikes in online forums focusing on luxury goods. One person claimed online that her shopping assistant in the United States told her about the price hike plan. Others responded by posting comments that they also heard similar rumors.
It is reported that the price of Chanel's classic medium-sized flap bag, which carries a price tag of 8.64 million won ($7,641) in Korea, will be raised by around $1,000. The bag will cost close to 10 million won after the hike.
While some people say they are not interested in buying Chanel products anymore citing the exorbitant price tags, others say they plan to do an "open run," which refers to customers lining up before opening hours to rush inside as soon as the store opens to grab the items they want.
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| People line up to enter a Chanel store inside Lotte Department Store in Sogong-dong, Seoul, June 29. Yonhap |
It is not the first time Chanel has raised prices in recent months. It raised the prices of a few items earlier this year, following two price hikes in May and November of 2020. Despite the COVID-19 pandemic and the price hikes, Chanel Korea saw its operating profit jump 34 percent to 149.1 billion won last year.
Kim Yae-ri, professor of Digital Marketing at Sejong Cyber University, said that the pandemic seems to have added to the phenomenon.
"People try to satisfy their desires through diverse forms of consumption, but now they have these channels restricted due to the pandemic," she said.
"For instance, traveling overseas used to be one of the channels, but now it is blocked. People thus seem to be turning more to luxury goods, which they see as symbols that represent their identity."
The professor said she believes luxury brands are aware of this.
"They know that people will purchase their goods even if they raise the prices," she said.
Korea is the world's seventh biggest luxury goods market as of 2020.
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