By BENJAMIN SCHNEIDER, DIANA LEE for Business of Fashion
As Versace becomes the latest brand planning to hike its handbag prices, BoF Insights looks at the degree to which consumers’ budgets accommodate these higher prices.
Brands have been steadily increasing the prices of their designer bags for years, long before the recent record inflation. The average price for a women’s designer bag in the US has risen around 27 percent since 2019, according to Edited research cited in BoF Insights’ report “The New Era of Designer Handbags.”
Versace is the latest luxury player to announce price hikes for its bags, which currently sell for between $1,000 and $3,000. John Idol, chief executive of Capri Holdings, Versace’s parent company, told an industry conference earlier this month that the increases better aligned Versace’s prices with those of competitors. Capri has also signalled that price increases were forthcoming at two other subsidiaries, Michael Kors and Jimmy Choo.
How do these increasing prices align with consumers’ budgets? A US survey in June 2022 from BoF Insights sheds some light on the matter. The average price of $2,475 for a designer bag is almost 2.5 times higher than the amount US general consumers say their budgets will allow, but is still within budget for approximately 60 percent of the US high-net-worth individuals polled.