Confronting a broad decline in demand for their usual fare, including $3,000-and-up handbags and $4,000-and-up cashmere jackets, major marketers of designer and luxury merchandise are broadening their product lines to emphasize scarves, belts, wallets and home goods priced at $500 and under.
The companies' renewed focus on more affordable products is meant to appeal to middle-class aspirational customers who are more price sensitive, although the strategy may dent companies' typically fat profit margins.
After more than two years of sharp price hikes — with Chanel, Prada and LVMH's Dior raising handbag prices by over 50% in France in 2023 compared to 2020, according to the Wall Street analysts at Bernstein — luxury labels are finding themselves at risk of alienating the middle class.
With your current subscription plan you can comment on stories. However, before writing your first comment, please create a display name in the Profile section of your subscriber account page.