On the upper east side of Manhattan in a very elegant apartment, just a few blocks away from the Chanel boutique, Jean Shafiroff is a fan of the brand.
"Styles come and go and brands come and go but it seems to me that Chanel remains," she says.
Shafiroff is wearing a forest green wool jacket (Chanel) and she's taken out a few of her Chanel bags to show to a reporter some of the classics. They have the signature quilted flap and interwoven metal and leather chain shoulder strap. She says, "If I’m willing to use a bag that I bought over twenty years ago, I think it’s pretty much a classic, don’t you?"
Philanthropist Jean Shafiroff with a classic Chanel bag and a biography of the designer.Sally Herships
But this is about more than just fashion — Shafiroff sees her choices as investments. "Like buying a piece of art," she says.
A philanthropist on the board of seven charities, Shafiroff hosts a lot of fundraising events, and she bought her first Chanel bag, the classic one — with the quilted flap and the leather and metal chain — in the 80’s. She still carries it.
"It's more chic now than it was then, because it’s vintage," she says.
But there’s nothing vintage about the price. In the mid-eighties, a classic Chanel bag was under a thousand dollars. Adjusted for inflation, the price today should be about double. But a similar purse now costs north of $4,000 dollars, way past the rate of inflation. The cost of labor is up, not to mention leather. Then there’s the euro versus the dollar — But, says Paul Swinand, an analyst with Morningstar, there’s another big reason the prices for Chanel bags have climbed so high.
"There are more rich people in emerging markets, and they’re getting richer faster than we are," he says.
Says Swinand, in markets like Asia, wealthy consumers have an enormous appetite for western goods: "They want Cognac. They want LVMH bags. They want Swiss watches."
And they want Chanel purses, but they don’t want everybody else to have them too.
A sequined Chanel bag owned by Jean ShafiroffSally Herships
"Think about it. You wouldn’t want everybody to have a Tiffany ring. You wouldn’t want everybody to have an Hermes bag," says Swinand. "The allure of a Patek Philippe watch or a special signature Chanel bag is to walk in and say, 'Oh my gosh, those are hard to get, you must have paid a lot of money for that.' Maybe you don’t say that explicitly but that’s the allure."
And Chanel knows it. So it keeps raising prices. Think of it as an exclusivity tax.
"This is not inflation increases, this is something that is really extraordinary, and replicates the index of living extremely well," says Thomai Serdari, a professor of marketing at NYU’s Stern School of Business.
She adds, "it is a manufactured, namely, an artificial market that keeps going up, as long as there are people who are wiling to spend."
And Chanel isn’t the only brand to have taken this approach. Think Ferrari. Even Nike, says Serdari, used pricing to set its sneakers apart. Burberry famously raised its prices after its trademarked plaid started becoming too popular.
From a business point of view, Jean Shafiroff can appreciate the exclusivity strategy — After all, she has an MBA.
“They’re making it less accessible and I think that’s a very smart business technique,” she says. But from a personal point of view, Shafiroff says she doesn’t have plans to buy a new Chanel bag anytime soon.
Just stop by Chanel's Madison Ave boutique and you can see the brand's strategy at work. To reinforce how precious they are, purses are presented on pedestals, one by one.
"Displayed the way objects would be displayed in a museum," says Sedari. “It is intimidating. It is done on purpose, it should intimidate you. You shouldn’t feel like anybody can participate in that world.”
On Friday, the Labor Department reports on November job creation and unemployment. Economists predict companies and government offices added 230,000 jobs, and that the unemployment rate was unchanged at 5.8 percent.
Over the past year the economy’s been adding on average 220,000 jobs per month. And the quality of jobs has gradually improved, says Mark Hamrick at Bankrate.com. One year ago, he says, the strongest job growth was in relatively low-skilled, low-paid sectors: bars and restaurants, hotels, retail.
“We’re seeing a greater collection of sectors participating in job creation,” says Hamrick, including “professional and business services, health care, construction, occasionally manufacturing.”
Outplacement firm Challenger, Gray & Christmas has predicted a strong hiring season for seasonal retail jobs, with companies including Amazon, Macy’s, Fedex, UPS, Walmart, Kohl’s and GameStop planning to increase hiring over last year. But after disappointing sales on Black Friday, “companies look at the traffic in their stores,” says John Challenger, “and if it’s really going to be down longer-term, they’ll pull some of those people back.”
When you think of stamps, you might picture paintings of ducks, and dead, forgotten presidents. But Friday in Philadelphia, two new stamps will be released, the first ever to feature a pro basketball player.
You could say he’s the basketball equivalent of Madonna or Elvis because the new stamps dispense with his last name and only say “Wilt,” stretched out as if to emphasize his 7-foot-1 stature.
“Wilt is the greatest player to ever play,” said Donald Hunt, a sports writer for the Philadelphia Tribune who headed the effort to get Wilt Chamberlain his own stamp. “He scored 100 points in a game, averaged 50 points in a game... at one point in his career he grabbed 55 rebounds in a game.”
But Chamberlain also did other stuff, including claiming that he slept with 20,000 women. The NBA star joins recent postal honorees like Janis Joplin and Jimi Hendrix, who died of drug overdoses. But that doesn’t mean they don’t deserve stamps, according to Chad Snee, editor of Linn’s Stamp News.
“If the committee had to weigh personal imperfections when determining whether or not someone could be honored with a postage stamp … we wouldn’t see too many people on our stamps anymore,” he said.
It's time for Silicon Tally! How well have you kept up with the week in tech news?
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