That Louis Vuitton handbag you’ve been eying might be your splurge item for the season, but what if we told you that for the price you pay at your local LV boutique you could have both the handbag and the vacation of your dreams?
According to Bloomberg, import duties, sales taxes and transport costs have always meant that luxury goods have different price tags in different countries, however s foreign exchange gets fickle the price differences seem to grow worse and worse as retailers are unable to keep up with fluctuating currency exchange rates.
Bloomberg Intelligence analyst Maja Rakic crunched the numbers for LV’s Capucines bag and found that if customers were to use the currency transparency that the internet offers today they can snag a piece of arm candy from another region which offers lower prices and margins. This would of course affect the company’s profits, but it puts valuable dollars back in your pocket.
For international luxury enthusiasts, a massive 50 percent price differential means that flying to Paris to make a purchase might still be cheaper than buying the same item at home. Honestly, this is what the French Government should be advertising if they really want to make Paris a shopping hotspot again.
Bloomberg also found that for Chinese buyers (who are proving to have a voracious appetite for luxury goods), it is more economical to travel to the U.K. to purchase a Burberry Trench than to buy one on Chinese soil.