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Reuters Published December 20, 2024 Reading time
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Luxury labels bulk up on lower-priced goods to appeal to middle-class shoppers

By
Reuters Published
December 20, 2024

Confronting a broad decline in demand for their usual fare, including $3,000-and-up handbags and $4,000-and-up cashmere jackets, major marketers of designer and luxury merchandise are broadening their product lines to emphasize scarves, belts, wallets and home goods priced at $500 and under.

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The companies' renewed focus on more affordable products is meant to appeal to middle-class aspirational customers who are more price sensitive, although the strategy may dent companies' typically fat profit margins.

After more than two years of sharp price hikes -- with Chanel, Prada and LVMH's Dior raising handbag prices by over 50% in France in 2023 compared to 2020, according to the Wall Street analysts at Bernstein -- luxury labels are finding themselves at risk of alienating the middle class.