Tiffany & Company, the world’s third-largest jewelry company owned by French luxury group LVMH, will raise the prices of its products in Korea starting next week. This will mark the third price hike of the year, following raises in February and June.
Tiffany is increasing prices of several products including its milgrain wedding bands by an average of 5-10 percent on Sept. 26, according to sources on Monday.
The milgrain wedding band is popular among Koreans - couples planning to tie the knot are willing to wait 2-3 months to receive rings their size. “The exact price increase for each item will be disclosed on the day of the increase,” said a Tiffany Korea representative.
Tiffany Korea has previously raised the prices of its jewelry by an average of 5-6 percent in February and June. The scheduled September price increase will be its third. In November of last year, the company upped prices of all its diamond-encrusted products by 7-8 percent.
Industry insiders and analysts have attributed the company’s frequent price hikes in recent years to LVMH’s $15.8 billion acquisition of Tiffany in 2021.
The luxury conglomerate since then worked on transforming the former American mid-market jeweler into high-end luxury. The investment paid off - profits have doubled since LVMH took over - but elevating the brand’s high jewelry proposition came with price increases.
After several years of record growth, LVMH reported weaker-than-expected sales amid a looming economic downturn this year. The luxury conglomerate, which owns 75 brands including Louis Vuitton and Dior, reported a 1 percent dip in U.S. sales in the second quarter. Asia sales surged 34 percent in the second quarter, but LVMH faces the risk of disappointing sales growth as the Chinese economy falters.
Some analysts think LVMH may be looking to boost sales by raising prices at Tiffany, which has been performing well after the acquisition. Sales of the luxury conglomerate’s watches and jewelry sector increased 11 percent in the first half of the year.
Korea’s top three department stores also posted a decline in profits as economic growth slowed in the second quarter.
Experts say Tiffany’s price hikes could help turn things around. “Raising the price of luxury goods tends to increase sales immediately, and demand for high-end jewelry including wedding rings rarely falls even after a price hike,” said an industry insider.
Tiffany Korea reported a significant increase in sales last year as newlyweds postponed weddings originally planned for 2020-2021 until after the pandemic, which resulted in a surge in demand for wedding-related gifts, including jewelry.
Last year, Tiffany Korea’s sales reached 359 billion won ($267.5 million), up 25 percent from the previous year. Operating profit was up 25 percent to 21.6 billion won.
This article was originally published on Sep. 18, 2023.