Why It Might Be Worth Traveling All the Way to Paris to Buy a Handbag
How much is that Louis Vuitton handbag in the window?
It seems that it's anywhere between 4,250 euros ($4,520) and 6,374 euros, depending on where you are.
While import duties, sales taxes and transport costs have long meant makers of luxury goods price items differently in different countries, at times of strong foreign-exchange volatility these variations get exacerbated as retailers can't adjust as fast as currencies can move.
The increased transparency conferred by the internet means, to companies, that "profitability may be damaged if sales shift to regions with lower prices and margins," according to Bloomberg Intelligence analyst Maja Rakic, who ran the sums on the brand's large, grained leather Capucines handbag.
For consumers, the 50 percent price differential means that a trip to Paris to buy a Christmas present could work out cheaper than making that same purchase at home.
While France is the least expensive place to procure Louis Vuitton's handbag, in the U.K. the pound's 14 percent year-to-date depreciation against the dollar has also given a boost to foreign shoppers' purchasing power. For Chinese consumers, who are the world's most enthusiastic purchasers of luxury goods, Burberry's traditional Chelsea trench coat is, for now, most reasonably priced in the country where its made.
It seems that what Brexit takes away in Apple Macs, it gives back in their gabardine equivalents.