Chanel may limit purchases in exclusivity drive

CHANEL could replicate purchase limits on its quilted Classic Flap handbag on other high-end products and in more countries, the French brand told Reuters, as luxury houses tighten their grip on distribution amid soaring demand.

“We have sometimes to limit the number of items a single client can buy,” Chanel’s chief financial officer, Philippe Blondiaux, said in an interview when asked about a report on the Pursebop website that it would only allow shoppers to buy two Classic Flaps a year – which can cost $10 000 each (about R156 800).

Blondiaux said the limits, which would not be imposed globally, were aimed at protecting customers and curbing bulk buying.

Analysts say Chanel wants to make its brand even more exclusive and is also seeking to counter a boom in the resale market for luxury goods.

“It can be implemented on certain product ranges, not only the flap bag – it could impact some items which are in hot demand, and fortunately or unfortunately, there are quite a lot at Chanel, so this is the kind of measure which we could implement in different countries at times," Blondiaux said.

The company has already been limiting purchases of the famed handbag in South Korea, where long queues can form before dawn outside Seoul stores as shoppers brace for what’s known as an “open run” – a sprint to Chanel’s doors at opening time.

Some resellers have told Reuters they were hiring “line-standers” for up to $125 a day to queue or enter stores on their behalf.

The possible broader use of purchase limits comes amid an industry drive for exclusivity, with Chanel repeatedly hiking prices for its handbags during the pandemic. The group says its aim is also to reduce the price gap between different regions.

After the latest increase in March, the fourth since the start of 2021, some of Chanel’s signature handbags, including the Classic Flap, in some cases now cost twice what they did in 2019.

LVMH-owned Louis Vuitton and Kering’s Gucci have also been increasing prices to protect margins and, more recently, to counter rising costs of transport, logistics and raw materials.

Blondiaux said Chanel could implement further increases in July to account for currency fluctuations, particularly the weakness of the euro and inflation. High-end fashion and jewellery brands have so far seen little impact from the rising cost of living, with strong local demand making up for the lack of global tourism, the industry’s traditional growth driver.

While restricting purchases may cause “short-term frustration” for some customers, they are understanding overall, according to Blondiaux.

He said a 300-euro limit for sales to customers whose main residence is Russia was enforced to comply with international sanctions.