Analysis on Linkedin by Jules Pastor
Where high inflation has only been a common theme for basic necessity products in the last couple of years, it has been a common occurrence for the past decades in luxury. With the sector seemingly slowing down in 2024 and 2025, I thought it would be interesting to look at just by how much the price of luxury bags had increased relative to that of other consumer products.
Using the year of launch of each bag, their original retail price, and an inflation adjusting software, we calculated how much these bags would be worth today if their prices had increased at the same rate as other consumer goods and compared them to their current retail prices.
Here are the results:
Neverfull, Louis Vuitton:
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Original Retail Price: 500 € in 2012
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Inflation Adjusted 2025: ≈630 €
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Current Retail Price: 1500€
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Current to Inflation Adjusted Price Ratio: 2.4x
Saddle, Dior:
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Original Retail Price: ≈1000 € in 1999
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Inflation Adjusted 2025: ≈1500 €
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Current Retail Price: 4500€
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Current to Inflation Adjusted Price Ratio: 3x
Birkin, Hermès:
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Original Retail Price: ≈1500 € in 1984
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Inflation Adjusted 2025: ≈3530 €
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Current Retail Price: 9800€
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Current to Inflation Adjusted Price Ratio: 2.8x
Timeless, Chanel:
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Original Retail Price: ≈1800 € in 1983
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Inflation Adjusted 2025: ≈4800 €
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Current Retail Price: ≈10600€
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Current to Inflation Adjusted Price Ratio: 2.2x
Unsurprisingly, the fashion houses have raised prices faster than the rate of inflation over the life span of some of their most popular bags. What is shocking is the rate at which they have done so. There seems to be no distinction between historical models or more recent ones, with an average increase in price relative to inflation between 120% and 200%.
Where the ever-increasing price of luxury goods may have helped increase brand revenue and allure to the consumer, it seems that for some this strategy may be coming back to haunt them. The 2024 financial results of both LVMH and Kering seem to indicate so, and although Hermès seems to continue to sail through the storm, the rest of the luxury market has signs of cracks in the hull.
Do you think luxury houses will continue to increase the price of their most popular items, or will the recent results force them to slow down the pace?
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