Due to the economic recession, the sales of luxury brands, which had been on the rise, have recently been declining, leading to price reductions.
According to the Korea Economic Daily on the 12th, the British luxury brand Burberry recently reduced its domestic prices by about 20%. This is the first time a luxury brand has lowered prices in the domestic market since the COVID-19 pandemic.
With this price reduction, the medium-sized Burberry Knight Bag has been reduced by 740,000 won (556 usd), from the previous 4,590,000 won (3,450 usd) to 3,850,000 won (2,894 usd). The price of the small-sized bag of the same design has been reduced by 880,000 won(661 usd), from 4,250,000 won (3,194 usd) to 3,490,000 won (2,623 usd).
Burberry has been struggling due to the stagnation of major luxury markets, including China, and the rapid rise in prices. As a result, its stock price plummeted, and it was excluded from the FTSE 100 index, the representative index of the London Stock Exchange, for the first time in 15 years.
French luxury brand Kering Group and Italian luxury brand Gucci have also reduced their prices by 3-15%.
The industry expects that luxury brands will continue to lower prices in the future as consumers tighten their wallets due to the “three highs” (high interest rates, high exchange rates, and high oil prices).
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