PARIS, France — Louis Vuitton, which last month raised prices by an average 12 percent in Japan, has imposed similar increases on non-leather handbags in most of its main markets since the start of the year, according to HSBC.
The trunk maker owned by Paris-based LVMH Moet Hennessy Louis Vuitton SA lifted prices on bags such as the Speedy and NeverFull by about 10 percent in the euro region, Antoine Belge, an HSBC analyst, said today in a note to clients. Vuitton raised prices by at least 10 percent in the U.K. and U.S., and by 5 percent to 10 percent in Asian markets including China, Hong Kong, Taiwan and Singapore, the analyst wrote.
The euro’s strength against some currencies may lead LVMH to charge more, Chairman and Chief Executive Officer Bernard Arnault said Jan. 31. Vuitton’s price increase in Japan, the biggest ever by the brand in the country, was taken to offset the impact of the yen’s slide on sales, the company said Feb. 20.
In addition to protecting margins, the “price increases must be seen, in our view, as a means to accelerate LV’s repositioning towards more leather,” Belge wrote. The decision will probably weigh on the number of items sold, though it’s “the right thing for brand equity longer term.”
Vuitton’s 2013 sales may rise 6 percent, excluding currency moves, while volume may decline 2 percent to 3 percent, Belge wrote. His estimate assumes a high single-digit average price increase, including unchanged prices for most leather bags.
By: Andrew Roberts; editors: Thomas Mulier, David Risser