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June 02, 2008
Ferragamo Japan, which imports and sells products made by Italian luxury brand Salvatore Ferragamo, has announced a 7-10% price decrease on women's and men's goods sold in Japan. In total 42 different products, including handbags and men's shoes will be affected by the price reduction. Due to the effects of such things as lower stock prices and other influences, the outlook on future consumption of high-priced goods is generally considered to be quite unclear. As such, it is thought that this move to lower prices will give a favorable and economical impression to the goods sold by the brand to match the current conditions.
Over the past three years Ferragamo has seen price hikes on the order of 20% on average due to such factors as a higher priced Euro and increasing costs of raw materials, in particular for leather goods. As a result of these factors other luxury brands have recently announced price increases, including Louis Vuitton with an average 1.5% increase in May. However, aside from America, Japan is the most important market for luxury goods. As such, in order to not distance themselves from their customers with price hikes brands should be taking another look at their pricing policy, as indicated by the actions of the Italian brands head office.
Japan is the only market in the world which will see these price decreases.