According to the Wall Street Journal, luxury brands, like Burberry and Saint Laurent are attempting to reclaim market share by reducing prices. Data indicates that Burberry has recently slashed the price of its medium-sized Knight bag by 22%, and the brand has lowered the price of all handbags designed since creative director Daniel Lee took over, by an average reduction of 5%.
Meanwhile, Saint Laurent has also reduced the prices of its popular Loulou handbags across various sizes in the US market. The small Loulou bag, for example, saw a price drop of 10%, from $2,950 in January this year to $2,650, though this is still above the price tag of $2,050 at the end of 2020.
While aggressive price increases are still acceptable for top-tier luxury brands, like Hermès and Chanel, which cater to ultra-high-net-worth consumers less sensitive to price hikes, such a strategy may have been a significant misstep for mid-tier brands like Burberry and Saint Laurent over the past five years.
The key difference lies in the fact that top luxury brands have successfully demonstrated their brand value to the market, while mid-tier luxury brands have struggled with a shaky brand value foundation, slow growth, and ongoing transformations. These brands lack the brand equity necessary to support price hikes.
Saint Laurent Le 5 a 7 hobo bag
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