The Rise of Luxe: What Luxury Fashion Is Doing in 2025

Luxury fashion is making some interesting changes in 2025. Top-tier brands like Hermes, Cartier, and Dior have already increased their prices and it is expected that Chanel will join them sometime this year. Let’s dive into these price increases, what it means and how it will affect the consumer.

The Rising Cost of Couture: Why Luxury Fashion Is More Expensive Than Ever

If you follow the news in luxury fashion, you know that some people have been saying that luxury brands are dropping their prices. This is only true of some brands, like Burberry who decreased their medium-sized Knight bag by 22% and the price of all handbags by 5%, other brands have been raising prices. [1] This brings into question the hierarchy of luxury brands. The top-tier brands like Hermes and Dior, who have a great resale rate, have increased prices. But it’s not just those top-tier brands raising prices. Gucci, Prada and Louis Vuitton have also raised prices this year. It is still unclear if Versace prices will be raised, with the acquisition of the brand by Prada.

While most brands do have a steady incline in prices over the years, 2025 is much different. Brands decreasing prices may finally be catching on to consumer wants & needs and recognize that their pricing makes an impact. Could the 2.22% decrease in Burberry’s 2024 revenue be a factor in their price decrease?[2] Probably, along with the intention of shifting the market to capture a wider customer base. Yves Saint Laurent had a 9% decrease in their 2024 revenue (compared to 2023) and also lowered their famous Loulou bag by 10%. [1] We also need to account for the recent tariff increase and the increase of the cost of goods.

What does the inconsistent pricing of luxury brands mean?

To put it simply, luxury brands are adapting to the financial climate of the world. While some brands are raising prices to account for the increase of tariffs and cost of goods, others are lowering prices to bring in more customers. It is unclear at this point about which strategy will prevail as the better option, though. Things may be clearer at the end of the fiscal year when we can compare annual revenues to the prior year. So far for the first quarter, Hermes revenue is up from last year, but other brands who have increased prices have seen a decrease. Burberry and Yves Saint Laurent, who have been lowering prices also saw a decrease in first quarter revenue.

What does this mean for consumers?

There is a 50/50 split of what this will mean for the consumer. For starters, brands with price decreases are great because you can get luxury items at a lower cost! On the other hand, brands that have increased prices are now more expensive and may deter some buyers. At the moment, some luxury fashion brands are now more affordable than last year and it’s a great time to take advantage of these prices.