Chanel raising prices to halt European bargain hunting

French luxury brand Chanel announced it will raise the prices of flagship handbags such as the Boy Chanel, Chanel Classic and Chanel Grand Shopping Tote starting Sunday. According to Chanel Korea, the biggest increase will be on the Boy Chanel small size, which will increase to 5.01 million won ($4,400) from 4.7 million won, up 6.6 percent. In terms of price difference, the Chanel 2.55 medium bag and Chanel Timeless Classic jumbo bag recorded the biggest increase, from 390,000 won to 6.39 million won. The average increase is about 5 to 6 percent.

Chanel proposed they will equalize their product prices worldwide earlier this March. The policy is to prevent Asian customers from purchasing in European markets because of the price differences in Europe and Asian markets stemming from the weaker euro.

While the price change is also taking place in China and Singapore, some shoes and wallet prices will be cut by 21 percent.

The handbag prices are being raised because Chanel has already lowered their prices in March, but prices of other products excluded from the previous discount will be lowered to an appropriate level, according to Chanel.

Since there have been rumors that Chanel will increase handbag prices, and the company informed its VIP customers in advance, some of the products that are subject to inflation were sold out at many stores.