Louis Vuitton raises prices in America

With very French discretion, Louis Vuitton has increased the prices of some of its most iconic products in the United States, including a $100 price hike for the famous Neverfull GM bag, which now costs $2,200: a 4.8% increase that comes just weeks after the United States imposed a 10% tariff on imports from the European Union. The move marks the beginning of what could become a broader wave of price adjustments in the fashion sector in response to growing trade tensions. According to some analysts cited by BoF, the increase was not applied uniformly across all Louis Vuitton products. Some bags remained unchanged, suggesting that items produced in the brand’s American workshops may be exempt from tariff-related hikes, although credible sources have noted that Louis Vuitton's US production is struggling to take off. Nevertheless, the maison’s pricing strategy already signals how fashion intends to proceed: luxury brands are ready to pass on the additional costs to consumers, especially in markets where demand and brand strength remain high. The United States accounted for almost a quarter of LVMH’s sales in the first quarter of 2025. Louis Vuitton is not alone in this direction.

Hermès has also announced a price increase specifically for the US market starting May 1. Hermès executives emphasized that the hike is intended solely to absorb the costs of the new tariffs and will not affect other markets. The American market is crucial for Hermès, accounting for nearly 17% of its revenues in the early months of 2025. Although the company reported solid results in the first quarter, growth slowed compared to the previous quarter, partly due to weaker demand for watches and perfumes. At the opposite end of the market, fast fashion platforms like Shein and Temu are taking similar steps. Both have issued statements on their US websites warning customers of upcoming price adjustments due to rising operating costs linked to tariffs. Temu cited tariffs of up to 145% on goods from China, while Shein reiterated its commitment to maintaining quality despite the increased costs. These changes highlight a broader shift in the retail landscape.

The tariffs imposed by the US administration are starting to affect many product categories – from luxury handbags to low-cost clothing, electronics, and household goods. Brands are being forced to rethink pricing strategies, supply chains, and communication methods with customers. A large number of them – including fast fashion, indie brands, and big fashion giants – are opting for transparency, directly informing customers about tariff-related costs. Others are considering a restructuring of their marketing budgets, shifting the focus from brand awareness campaigns to tactics aimed at converting more hesitant shoppers. For luxury brands, the challenge is even more delicate: justifying price increases without alienating loyal customers, while maintaining the perception of exclusivity and value. In an uncertain commercial context, fashion companies are making calculated choices. Whether these prove successful will depend not only on economic policies, but also on their ability to keep customers loyal – and willing to spend more.