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There is nothing cheap about buying a Chanel handbag, and the prices are about to go even higher in Europe. NPR's Jackie Northam reports it's part of an effort to stop sales on lucrative secondary markets.
JACKIE NORTHAM, BYLINE: If you're a person who loves the look and feel of a Chanel handbag, you might think twice about where you buy it. If a classic handbag in, say, Paris costs about $3,500, that same purse will set you back more than $6,000 in China. Now Chanel is narrowing that price gap, bringing the two regions more in line. The Paris-based fashion house said the decision is driven in part by the depreciating Euro, which has slid to a 12-year low. Hana Ben-Shabat, a retail and consumer goods specialist at A.T. Kearney, says the new prices are expected to eliminate the so-called gray market.
HANA BEN-SHABAT: People would actually take the trip to Europe and buy in quantities that they can go back then to China and charge more than they pay for, but less than the local market and make money on that. By aligning prices, you're eliminating this behavior because this behavior is really undermining the brand.
NORTHAM: Ben-Shabat says Chanel is also lowering costs in China to re-energize that important market. Other luxury goods companies are expected to follow suit. Jackie Northam, NPR News.
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