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Will Kering and Hermes follow Louis Vuitton’s lead on prices?

February 16, 2022
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Will Kering and Hermes follow Louis Vuitton’s lead on prices?
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  • Kering studies outcomes on Thursday, Hermes on Friday
  • Concentrate on larger worth as manufacturing, transport prices rise

PARIS, Feb 16 (Reuters) – When Gucci-owner Kering (PRTP.PA) and Hermes report earnings this week, traders will likely be searching for indicators that the massive luxurious trend teams are assured that rich customers are keen to pay larger worth tags for designer equipment.

Rival Louis Vuitton (LVMH.PA), the world’s largest luxurious label, stated on Tuesday it could increase costs globally from Feb. 16 as a result of larger manufacturing and transport prices – one of many first main luxurious manufacturers to take action this 12 months. learn extra

Pricing energy may emerge as a key driver of income progress once more in 2022 for the highest tier of the style and leather-based items trade, following a string of worth hikes in 2021 and 2020.

Register now for FREE limitless entry to Reuters.com

Shoppers got here out of lockdowns wanting to spend their money on luxurious trend and equipment, after months of being caught at dwelling. Manufacturers are making the most of that spending energy to make their wares much more expensive and unique.

Bloggers on China’s social media platform Xiaohongshu are forecasting larger costs from Kering revenue engine Gucci from as quickly as Friday. Gucci’s small Marmont shoulder bag, which at present prices 16,500 yuan ($2,602), is seen going up round 3%, whereas different Gucci equipment may climb 10-15%.

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After key Russian bond payment, attention turns to next due dates

Customers of the Xiaohongshu web site, identified within the trade as Little Crimson Guide, typically cite gross sales associates for the style labels and have a monitor file of appropriately predicting worth will increase however don’t all the time specify their sources.

Kering’s Balenciaga already raised costs in early January in China, based on the Xiaohongshu web site. The price of the label’s curvy Hourglass purses in dimension small and extra-small, as an example, has risen by 3.5-4% to 17,500 yuan and 11,550 yuan respectively.

Kering declined to remark, noting it’s in a closed interval forward of its annual earnings on Thursday.

Hermes instructed Reuters it could be prone to tackle the pricing difficulty when it studies earnings on Friday, denying analysts’ studies that the corporate had already elevated costs final month by 3% to 10%.

Chanel raised the costs of a few of its most wanted purses thrice final 12 months, with its small traditional purse now costing round $8,200, or 60% greater than in 2019. learn extra

“This 12 months is prone to carry a virtuous circle of pricing energy and model desirability,” UBS stated in a notice to shoppers.

Kering is predicted to report natural gross sales progress of 20% over the fourth quarter, HSBC has forecast, helped by advertising and marketing investments producing buzz round Gucci’s a centesimal anniversary – final 12 months.

Gross sales at Hermes are anticipated to rise 12% at fixed overseas change charges over the interval, HSBC stated.

($1 = 6.3399 Chinese language yuan renminbi)

Register now for FREE limitless entry to Reuters.com

Reporting by Mimosa Spencer and Shanghai newsroom, enhancing by Silvia Aloisi and Jane Merriman

: The Thomson Reuters Trust Principles.

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