Source: Bloomberg – LVMH Raises Vuitton Japan Prices Most Ever to Fight Weak Yen
LVMH Moet Hennessy Louis Vuitton SA raised some prices by an average 12 percent at its flagship brand in Japan, the unit’s biggest increase, to offset the impact of the yen’s slide on sales.
The Louis Vuitton brand raised prices Feb. 15, spokeswoman Kaori Fuse said. Retailers such as LVMH, the world’s biggest luxury goods maker, are confronting a plunge in the yen that undercuts the value of sales in Japan, the second-biggest market for personal luxury goods.
The yen has depreciated against both the dollar and the euro as Prime Minister Shinzo Abe talked down the value of the currency, promising to implement policies to stimulate the economy and have Japan’s central bank set a 2 percent inflation target. Finance officials from the Group of 20 this month signaled Japan has scope to stimulate its economy, as long as policy makers cease publicly advocating a weaker yen.
“There’s a risk of a currency battle” after the yen plummeted at the end of last year, LVMH Chief Executive Officer Bernard Arnault said Jan. 31.
“We are an importer, so the weakening yen and rising raw material prices are part of the reason for the price increase,” Louis Vuitton Japan’s Fuse said in a phone interview. The increase is the largest since the Japan unit was established in 1978, said Fuse.
The yen has dropped about 13 percent against the dollar in the past three months, the worst performance among 16 major currencies tracked by Bloomberg.