S.Korean shoppers go the distance to beat Chanel price hike

SEOUL (Reuters) - More than a hundred shoppers waited in line outside a Chanel store in Seoul on Wednesday, shrugging off concerns about a second wave of coronavirus infections to beat imminent price hikes by the French luxury brand.

South Koreans have been flocking to shops since the government this month began easing social distancing guidelines aimed at containing the virus, indicating a release of pent-up demand from people who had refrained from going outdoors.

Online speculation of Chanel price hikes prompted face-masked shoppers to arrive as early as 5 a.m., forming a closely spaced queue which snaked around the Lotte Department Store in downtown Seoul. Those in line received a numbered entry ticket ahead of the store opening at 10:30 a.m.

Longer than usual lines also formed at Chanel stores in China as people discussed pending price increases, social media posts showed.

Chanel later confirmed that it was increasing prices of handbags and some small leather goods worldwide. It said the increases ranged between 5% and 17% in euros, which reflected a rise in some raw material prices.

“The price adjustments only regard Chanel’s iconic handbags, 11.12 and 2.55, as well as Boy, Gabrielle, Chanel 19 bags, and certain small leather goods,” it said in a statement responding to a Reuters query.

“These adjustments are made while ensuring that we avoid excessive price differentials between countries, in line with our commitments regarding price harmonisation.”

People queue to enter the Chanel boutique at a department store amid the coronavirus disease (COVID-19) outbreak, in Seoul, South Korea, May 13, 2020. REUTERS/Minwoo Park

In Seoul, Lee Ji-yeon, 54, said she arrived at about 7:30 a.m. and her future son-in-law was at another department store to buy a Chanel bag for her daughter as a present for their wedding, which the virus had pushed to next year from November.

“We’ve been to the Chanel store several times before and agonised whether to buy it or not. But since the prices are going to increase, we decided to buy it now,” Lee said.

Many South Koreans gift luxury bags for weddings, including a man in the queue who also said his wedding had been postponed.

The queue formed just as more than 100 new COVID-19 cases linked to nightclubs in Seoul prompted fears of another wave of infections in a country held up as a coronavirus mitigation success story.

Chanel said it had put in place queue management measures to minimize the formation of long lines at store entrances.

A representative for the company in Seoul said the firm had raised prices in its French home market on Monday and that other markets would follow.

“In these challenging times for our manufacturers and suppliers, it is essential for Chanel to continue to support them in the best possible way,” the Paris-based firm said.

The Lotte Department Store said luxury goods sales jumped 30% from May 1 to May 10 compared with a year earlier, outperforming overall sales.

“Luxury goods posted unusually high growth in sales compared to other products,” said spokesman Moon Ho-ik. “There are two or three times more people than normal waiting in line.”

Moon attributed the spike to pent-up demand from people who had stayed at home to avoid the virus, as well as from those who would usually buy luxury goods abroad where they can be cheaper, but who have been unable to travel during the pandemic.

South Korea is the world’s eighth-biggest luxury goods market, according to researcher Euromonitor. The country has recorded almost 11,000 cases of COVID-19 and more than 250 deaths.

Additional reporting by Minwoo Park and Jack Kim in Seoul, Silvia Aloisi in Milan and Sarah White in Paris; Editing by Christopher Cushing and Giles Elgood