Luxury Brands Will Continue To Rise In Price, Which Will Not Be Over Soon.

All luxury goods companies are sparing no effort in controlling prices and narrowing the global spread. The latest devaluation of the renminbi has made many Western luxury brands face a worsening dilemma.

Affected by the depreciation of the renminbi, the consumption of overseas Chinese tourists and overseas purchasing agents will inevitably decrease, and the depreciation of the renminbi will make the strategic abacus of luxury domestic prices empty.

Clothing companies have found that their European dealers are also affected by price or hedging problems.

Uggs manufacturer Deckers said the strong US dollar led to a reduction in its international distributor orders and their purchasing power was cut off.

Another side effect of the strong US dollar and the weakness of the euro is a marked change in tourism consumption patterns.

The link between the renminbi and the US dollar will be strengthened.

The Chinese government has shifted its purchasing power to Europe because of the anti corruption version of the Chinese government.

Japan has also ushered in a wave of China's tourism consumers for higher currencies.

In March of this year, the euro fell to its lowest level in the 12 year against the US dollar at $1.95, and rose slightly to $1.09 in the latter period. Deutsche Bank strategic analysts predict that the euro will fall to 90 cents against the US dollar at the end of 2016, and will continue to fall to 85 cents by the end of 2017.

Whether or not this speculation will come true, fashion brands are being forced to adapt to the pattern of currency exchange rate changes.

One of the quick and ruthless ways is to raise prices in the euro area.

Because of the value of the renminbi linked to the US dollar, some companies have taken measures to reduce prices in the Chinese market.

Chanel is one of the companies that adopted this measure. In April, the brand handbag depreciates in China, and the price rises in the European area after the first Euro collapse.

With the emergence of the grey market in Europe, a large number of buyers bought the handbags in euros at low prices, and then sold them to high priced consumers at a high price. Thereafter, Chanel's classic brand.

The price increase is as high as 20%.

June,

& Co. cowboy costumes are being raised in Europe.

In a recent performance report, Ralph Lauren said that the company would raise its price in countries affected by currency devaluation, and the price increase would be between the median and high level.

For some non large global fashion enterprises, such as

Or Bloomingdale 's and so on are also affected by the strong dollar, and the purchasing power of overseas tourists in major cities has been much worse than before.

The earnings of non US headquarter companies are also affected by monetary resistance, but the modes of influence vary.

For example, H&M is located in Asia, where the currency is pegged to the US dollar, but their price is shown in inferior euro.

Neiman Marcus said that in its S-1 document prepared for IPO, it has been shown that a large part of the stock of the brand comes from overseas suppliers whose goods are priced in different currencies.

Global companies that have grown overseas have found that overseas turnover is not dominant after they are returned to the US dollar.

Levi 's said its original revenue increased by 1%, but its income declined by 6% because of the exchange rate effect.

In Europe, the net turnover of Levi 's increased by 9% in the first quarter, but income was pulled down by 46 million dollars due to exchange rate differences.

Most companies try to use hedging pactions to mitigate these unstable currency valuations.

Unfortunately, these deals have aggravated the problem.

Jean-Marc Duplaix, chief financial officer of Kai Yun group, said in a recent conference call of the company's performance report: "more than half of Gucci's performance declines are due to currency fluctuations and hedging."

"Currency is always hard to predict," said Jean-Jacques Guiony of LVMH group in a recent conference call.

Although LVMH group has benefited from currency exchange, it is also facing currency hedging.

LVMH group stated in its statement that the net expenditure in the first half of 2015 was 207 million euros, which amounted to $225 million under the current exchange rate.

This is much higher than the 67 million euro ($72 million) in the first half of 2014.