- Crocs, Ralph Lauren, and Michael Kors are among retailers that are raising prices.
- Apparel prices across US retailers rose nearly 5% in June, the biggest leap in a decade.
- Rising supply chain and labor costs are among the factors driving these price hikes.
Fashion retailers are raising prices and scaling back discounts to make up for lost sales in 2020, and to offset rising supply chain costs.
According to the Department of Labor’s June Consumer Price Index, apparel prices rose 4.9% in June versus the year before — the largest jump in a decade. Crocs, Michael Kors, and Ralph Lauren are among those brands that have already raised prices.
The supply chain crisis is driving up the cost of transporting goods, and leading to long delays. At the same time, retailers are trying to find workers in a tight labor market, and are raising wages or offering perks to attract talent.
Some say they have no choice but to pass costs on to the consumer.
These are some of the brands raising prices:
Ralph Lauren has been raising prices and cutting discounts since 2019. In its most recent quarter, its average selling prices were up 17%, it said.
CEO Patrice Louvet told investors in an earnings call that the company was adding products that could be sold at higher price points, such as jackets and coats, and focusing on specific countries that can absorb price increases.
But it’s still raising prices: Its average selling price was up 8%, to $21.84, in the most recent quarter, and it is planning more price hikes in 2022, mostly for customers in Asia, it said.
It is promising to be “careful” about price hikes.
“One thing that we’re very conscious of is the consumer value that the brand provides,” CEO Andrew Rees told Investors in July.
“We never want to be in a place where we’re turning consumers away because our product is too expensive in their mind … We’re very careful about pricing so we don’t push too far,” he said.
LVMH-owned Louis Vuitton has been raising prices on some of its bestselling handbags. According to the South China Morning Post, the price of its Pochette Accessoires Monogram Canvas went up by 25% this year, from $630 to $790. It also raised its prices in 2020.
Experts told The Post that this was to make up for missed sales in 2020 and to strengthen the view that its products are unattainable — which is exactly what makes them so appealing to some shoppers.
Chanel has hiked the prices of its handbags to offset missed sales in 2020. According to a note from Jefferies analysts, average global prices of its handbags went up as much as 17% at the start of July, on top of an 18% rise in June 2020.
John Idol, CEO of Capri, the retail giant behind Michael Kors and Jimmy Choo, said in an earnings call in July that prices at Michael Kors had already gone up and will go up “considerably” next spring.
Idol also wants to steer clear of heavy discounting — a sales tactic that plagued the brand in the past.
“I don’t care if our competitors do it. It doesn’t matter. We don’t have the inventory to do it. So it won’t happen,” Idol said.