Luxury Prices Have Increased 60% In 10 Years On Purpose

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We've written about how it's a commonplace thing nowadays to see a pair of designer bags and shoes with price tags well above $1,000 (and a few of the reasons that account for this increase), but The Business of Fashion is shedding new light in a recent article, explaining that this inflation isn't as incidental as we thought.

The cost of luxury products have hiked 60% in the past decade alone (for comparison, the cost of consumer goods have increased just 27%), and much of it has to do with raw materials, real estate, labor, and marketing materials becoming more expensive and scarce. However, the other half of the equation is based on attracting more wealthy consumers, like Burberry, who told BoF that as recently as March, "it would raise prices to increase its appeal to the upper end of its customer base." Just how many people can afford those $3,000 trenchcoats and $1,500 heels? A lot more than you think — the number of super-rich folks (high-net-worth individuals, whose assets total up to $46.2 trillion dollars) rose 9.2 percent in just 2012, to 12 million people for whom dropping a G (or two) is like dropping a Tic Tac. (BoF)
hermes-birken-opPhoto: Via Hermès