Burberry Is The Newest Member Of The Price Adjustment Group.

Besides cutting prices, it may damage the brand image. The reason why luxury brands are still wavering is the negative impact of price reduction on short-term profits, which is likely to hurt consumers' enthusiasm in European markets. But at this stage, luxury brands or wait-and-see, or stand by each other, but reviewing the pricing strategy is a key task.

Due to the recent weakening of the euro, Burberry has been deeply affected by most luxury brands. Apart from the evaporation of profits in currency conversion, more and more Chinese consumers are flooding into the European market, leaving the local market in the cold. Burberry Carol Fairweather, chief financial officer, said: "we adjust prices according to the quarter. Exchange rate fluctuations will undoubtedly have a huge impact on the global pricing system. Of course, we must also consider carefully and pay attention to the methods adopted by our peers. "

According to Barclays Bank analysts, Burberry ranks the top among luxury brands in Europe and China.

For example, the British official website sells at a price of 350 pounds (about 3227 yuan), while China's official price is 5250 yuan. The Fujimori report shows that the price of Burberry in China is 80% higher than that in Paris, which is 65%-70% higher than that in London.

Since March 17th, when Chanel announced that it would "balance global prices" and cut the price of the Chinese market by about 20%, it led to a series of queuing of luxury brands. The following are the current camps and are continuously updated.

In April 14th, LVMH announced its first quarter earnings in 2015. The group's revenue reached 9 billion 390 million US dollars (about 58 billion 300 million yuan), an increase of 16% over the same period last year. Chanel's practice of global price adjustment, Jean-Jacques Guiony, chief financial officer of LVMH group, said that LV would not do so. He even thought it was absurd. "For luxury brands, price adjustment is meaningless, and this will lead to brands unable to resist fluctuations in exchange rate."

But at the same time, he admitted that the "buying and selling" business derived from the huge price difference made LVMH headache. "Although you see customers in the store, you can't know whether he buys them for himself or sells them to China." Jean-Jacques Guiony said.

LVHM TAG's Heuer LV attitude is not so strong. In March 18th, Heuer announced plans to cut prices in China, Switzerland and the United States at the same time, with Hongkong down 13% and Mainland China by 8%. Subsequently, Dior, Patek Philippe, Cartire and other luxury goods also follow suit to join the price cuts.

Dior (Dior) China has also cut prices for the two hot bags of Miss Dior and Dior Soft, such as Miss Dior from 26 thousand Hong Kong dollars (about 20 thousand and 800 yuan) to 29 thousand Hong Kong dollars (about 23 thousand and 200 yuan).

Followed by Cartire, in April 14th, Cartire announced that it would reduce prices to balance the spread due to exchange rate fluctuations, and price adjustment involved all Cartire products. Such as Cartire classic series LOVE 18K gold and rose gold ring, the original price of 8500 yuan, after the price is 7750 yuan, Cartire blue balloon men's wrist watch band (36 mm) original price of 43 thousand and 900 yuan, after the price of 40 thousand yuan.

Prada expressed its intention to lower prices as early as the end of March when it released its 2014 earnings report. The Asia Pacific regional sales slump is seen as one of the "culprits" of the decline in earnings, while the Greater China region as a key Prada market accounted for 1/5 of the world's total sales, but sales fell by 6.3% in the 2014 fiscal year. Prada Marketing Director Stefano Cantino The group will consider cutting prices outside Asia outside Japan, but has not disclosed specific price cuts.

Versace (Versace) also revealed in March 24th that it would re-examine the world. Price strategy 。 "We are watching," said Gian Giacomo Ferraris, the company's chief executive. compete Opponents, see what they will do. " He said that if adjustments were made, the autumn and Winter Series delivery would begin in May this year.

Burberry is the newest member of the price adjustment group.

Rogerio Fujimori, an investment banking analyst at RBC Capital Markets, said in April 15th that LVMH is like a benchmark in the industry, and most other brands are "wait-and-see". In a February study, Fujimori analysis said luxury brands are in a dilemma: if European prices rise, local sales will be affected, but China's "grey market" can not be ignored. In addition, as more and more luxury goods set up online sales platform, consumers are clearly aware of prices around the world.

In addition to analysts, fashion media people also predict that this move seems radical, but in fact it is right. "We are now in a transparent world and consumers are not stupid," said Imran Amed, founder of Business of Fashion, the British fashion business news website. "Consumers are not stupid. They can see that the price of Chanel in China is two times higher than that in Europe. Because people travel, they go to different countries, and they look for the best prices.

Amed thinks Chanel's price cut is a wise move. "This is a long-term strategy. Chanel is not cutting prices. Its strategy is only to achieve global price consistency. This may lead other brands to follow suit. "