As Lily Li waits in line outside the Chanel SA store in Hong Kong’s central financial district, the nearby Chloe, Berluti and Ralph Lauren stores stand almost empty.
Li is among about 40 shoppers seeking to grab a bargain after Chanel started cutting prices in the region to account for a yearlong weakening of the euro that has driven Asian shoppers to cities such as Paris for their luxury purchases. Some didn’t make it inside, being turned away by a store employee because their chosen item had already sold out.
“It would have cost me more than HK$37,000 ($4,700), but now it’s HK$10,000 less,” said Li, 30 minutes into her wait behind 10 other shoppers for a black Boy Chanel bag. “I was planning to go to Europe to buy handbags, but there’s no need to travel there to shop now.”
Chanel and luxury Swiss watchmaker TAG Heuer said this week they will adjust prices globally because of currency fluctuations. A weakening euro has widened the gap between the price of items sold in China and Europe to an all-time high, with soft luxury-goods costing as much as 70 percent more in the Asian country, according to Exane BNP Paribas analyst Luca Solca.
“As the price cut between Europe and China gets more extreme, this prompts the Chinese consumers to buy abroad, either when they travel or through professional daigou agencies,” London-based Solca said, referring to the bulk buying groups. “Brands are not particularly keen to see a massive transfer from one region to the other.”
Read more at Bloomberg Business.