By Mimosa Spencer

PARIS (Reuters), When Gucci-owners are Kering (PA:), Hermes reports earnings this week. Investors will be watching for indications that big luxury fashion companies are confident wealthy customers will pay more for designer accessories.

Rival Louis Vuitton is the most famous luxury brand worldwide and announced on Tuesday that prices will rise globally starting Feb. 16, due to increased manufacturing costs. This was one of the first luxury brands to raise their prices this year.

Following a string of price rises in 2021-202020, the pricing power of top-tier fashion and leather goods could be an important driver of revenue growth for 2022.

After months of being locked down, consumers came out of the lockdowns excited to buy luxury accessories and fashion after months. To take advantage of this spending power, brands are making their products more expensive and exclusive.

China’s social media site Xiaohongshu predicts higher Gucci prices starting Friday according to bloggers. Gucci’s Marmont small shoulder bag currently retails for 16,500 Yuan ($2,602) but is expected to rise around 3%. Other accessories might go up by 10-15%.

Users of the Xiaohongshu web site are often known in the industry by the nickname Little Red Book. These sales associates have a record of correctly predicting price hikes but don’t always give their sources.

According to the Xiaohongshu web site, Balenciaga’s Kering has already increased its prices in China during January. Prices for the brand’s hourglass-shaped handbags, in sizes small and large, have risen by between 3.5-4% and 17,500 yuan to 11,550 yuan.

Kering refused to comment but noted it is currently in a closed period prior to its annual earnings.

Hermes said to Reuters, that pricing would likely be addressed when the company reports on Friday its results. Analysts had reported that Hermes had raised prices last month by 3% to 10.

Chanel increased the price of some of its most popular handbags three-times last year. The Chanel classic handbag is now priced at $8,200. This is 60% less than it was in 2019.

UBS stated in a note sent to clients that “This year will likely bring a positive circle of brand desireability and pricing power.”

Kering will report 20% organic growth over the fourth quarter according to HSBC. This is due in part to marketing investments that generated buzz about Gucci’s 100th Anniversary – last year.

According to HSBC: Sales at Hermes will rise 12% at constant foreign rates for the duration.

($1 = 6.3399 renminbi)