LVMH is (again) increasing its prices The group plans 2–3% annual price hikes amid luxury crisis

A good piece of news never comes alone. Sometimes, it's accompanied by a bad one to balance things out. An adage we should have considered after joyfully welcoming the announcement of Jonathan Anderson's appointment as the head of creative direction for all Dior collections, one of the top talents within the LVMH group, which has just offset this delightful news by declaring that the prices of its high-end products could increase by 2-3% annually. This announcement was made by Deputy CEO Stéphane Bianchi during a hearing at the French Parliament as part of a parliamentary inquiry into obstacles to reindustrialization, initiated by members of the Rassemblement National, which has stirred the luxury world, currently in the midst of an increasingly severe crisis.

Fortunately, the high-end products should be the only ones affected by this increase, which "is unlikely to impact demand" according to LVMH representatives present at the Assembly. Taking the example of high jewelry, Mr. Bianchi indicated that "clients of the group's most expensive items would be able to absorb such price increases". He nevertheless emphasized that "this does not mean that price elasticity is infinite". Conversely, raising prices for beauty products and cognac would be more challenging, explained Chief Financial Officer Cécile Cabanis, also present at the French National Assembly. Beyond this increase, the executives also stated their intention to continue investing in China, despite a growing decline in luxury consumption among Chinese consumers, while trade tensions between the European Union and the United States remain a challenge for the group and the luxury sector in general. LVMH's exit from the top 5 most powerful stocks in Europe doesn't help either, and it can now be stated without much risk that LVMH is facing a deadlock. It's uncertain whether ever-increasing prices are the solution to all its woes.