When the world gets closer.

We help you see farther.

Sign up to our expressly international daily newsletter.

Already a subscriber? Log in .

You've reached your limit of one free article.

Get unlimited access to Worldcrunch

You can cancel anytime .


Exclusive International news coverage

Ad-free experience NEW

Weekly digital Magazine NEW

9 daily & weekly Newsletters

Access to Worldcrunch archives

Free trial

30-days free access, then $2.90
per month.

Annual Access BEST VALUE

$19.90 per year, save $14.90 compared to monthly billing.save $14.90.

Subscribe to Worldcrunch

Why Living Rich Is Costing More And More

That Rolex won't come cheap, ever more so...
That Rolex won't come cheap, ever more so...
Nicole Vulser

PARIS - The price of luxury products is skyrocketing. The quasi-hypnotic appeal of some brands and the increasing number of extremely wealthy clients throughout the world is enabling luxury brands to hike prices to stratospheric levels year after year.

A pair of John Lobb shoes, a Kelly Hermès bag, a kilo of Petrossian Sevruga caviar, a bottle of 2002 Dom Pérignon champagne, a session with a Fifth Avenue therapist, a face-lift by a famous plastic surgeon, two seats at the Metropolitan Opera in New York, the chicest of Sikorsky’s helicopters, or a Rolls-Royce Phantom – these are some of the essential 40 goods and services used to calculate the renown “Cost of Living Extremely Well” index, created in 1976 by Forbes magazine.

In the past 35 years, the index has surged by 800%. During the same period, the American index of consumer prices only increased by 300%.

The transition to the euro confirmed this trend. Since 2001, the price of a dozen of luxury’s most emblematic products has increased much faster than the general index of consumer prices in France, which was calculated by the National Institute for Statistics and Economic Studies (Insee) between 2001 and 2011 (23.5%).

Really, really expensive products

For instance, in the past 11 years, the price of a Burberry gabardine cotton raincoat was multiplied by 5.6, from 122 to 1,190 euros. A pair of leather and textile Louboutin high heels jumped from 249 to 425 euros. Even more spectacular, a steel and platinum Rolex Yachtmaster watch went from 5,488 to 39,000 euros. A pair of Tod’s picot moccasins cost 122 euros in 2001; today it costs 270. A twill silk Hermès scarf now costs 310 euros, instead of 229.

Slightly more reasonable is the legendary pair of Ray-Ban Wayfarers, worn by movie stars and John F. Kennedy. It was sold for 90 Euros in 2000 and costs 145 today (+61%). Taking inflation into account, it is one of the rare products whose price has decreased during the past decade.

The price rise of eternal Chanel NËš5 perfume has been kinder: 7 milliliters (ml) of perfume went from 67.84 euros to 106 eleven years later. The 50 ml Allure men’s cologne from Chanel increased more, going from 32 euros to 58 today.

Waiting list

According to Thomas Mesmin, a luxury sector analyst at Cheuvreux, “for fashion and leather goods, prices have increased between 2001 and 2011 by 62%, and by approximately 78% for watches and jewelry.”

At a time when there is a waiting list and a minimum six-month delay to buy a 4,500-euro Hermès bag, a 3% price hike won’t change much. “These types of products target only a minority of clients, who are so wealthy that this kind of change has almost no impact on their purchasing,” says Mr. Mesmin

He says that “the highest prices are in China and Asia” - over 50% more expensive than in Paris – and that “some important brands” would not hesitate to risk losing their European consumers. “Price, in luxury, can be a positive way to differentiate a product,” he says.

Alexis Karklins-Marchay, an Ernst & Young partner, agrees. “The real players in the luxury sector use price increases to strengthen the fetishist aspect of brands,” he says. The higher the price, the more desirable the product. This is true for wines and spirits, but also for perfume, even though most of the “juices” are not actually very expensive.

Some companies, like Rolex, hiked their prices twice in 2011 alone, says Karlins-Marchay. On the used market, watches lose little value – a maximum of 20% compared to new watches – and buyers know they are not losing a lot of money with these yearly price increases.


Watches are actually one of the rare luxury products seen as financial investments. Some fans – or cautious investors – buy two of the same model twice. They wear one and leave the other one under cellophane in a safe, waiting to be resold.

For Serge Carreira, a teacher at the Sciences Politiques university in Paris, the luxury sector is unusual because “the more expensive a product is, the more it is defined as luxurious.” Many companies abandon entry-range products to focus on exceptional ones.

Mr. Carreira also says that the significant increase of luxury prices comes from shortages in some raw materials, such as crocodile and alligator skins or leather goods. But craftsmanship is also disappearing. In Italy, the number of workshops able to meet high-end clothing orders has decreased so much that those remaining can set their own prices.

Finally, and most importantly, the biggest companies have been rapidly expanding geographically for the past few years. Increasing prices is a way for them to continue reaping extremely confortable profit margins, all the while financing this costly expansion.

You've reached your limit of free articles.

To read the full story, start your free trial today.

Get unlimited access. Cancel anytime.

Exclusive coverage from the world's top sources, in English for the first time.

Insights from the widest range of perspectives, languages and countries.


Look At This Crap! The "Enshittification" Theory Of Why The Internet Is Broken

The term was coined by journalist Cory Doctorow to explain the fatal drift of major Internet platforms: if they were ever useful and user-friendly, they will inevitably end up being odious.

A photo of hands holding onto a smartphone

A person holding their smartphone

Gilles Lambert/ZUMA
Manuel Ligero


The universe tends toward chaos. Ultimately, everything degenerates. These immutable laws are even more true of the Internet.

In the case of media platforms, everything you once thought was a good service will, sooner or later, disgust you. This trend has been given a name: enshittification. The term was coined by Canadian blogger and journalist Cory Doctorow to explain the inevitable drift of technological giants toward... well.

The explanation is in line with the most basic tenets of Marxism. All digital companies have investors (essentially the bourgeoisie, people who don't perform any work and take the lion's share of the profits), and these investors want to see the percentage of their gains grow year after year. This pushes companies to make decisions that affect the service they provide to their customers. Although they don't do it unwillingly, quite the opposite.

For the latest news & views from every corner of the world, Worldcrunch Today is the only truly international newsletter. Sign up here.

Annoying customers is just another part of the business plan. Look at Netflix, for example. The streaming giant has long been riddling how to monetize shared Netflix accounts. Option 1: adding a premium option to its regular price. Next, it asked for verification through text messages. After that, it considered raising the total subscription price. It also mulled adding advertising to the mix, and so on. These endless maneuvers irritated its audience, even as the company has been unable to decide which way it wants to go. So, slowly but surely, we see it drifting toward enshittification.

Keep reading...Show less

The latest