By Sabrina Escobar

Luxury goods will be getting even more expensive as brands try to offset tariffs. The question now is, by how much will prices increase?

That is something not even luxury brands themselves have been able to answer. They say what uncertainty over happens next in trade policy makes it impossible to predict.

The Trump administration has imposed a 10% baseline tariff on nearly all imports to the U.S., and has threatened to impose additional levies on many top producers of luxury goods, including the European Union and Switzerland.

French luxury brand Hermès and Italian brand Brunello Cucinelli were some of the first companies to decisively announce they would be hiking prices. Since then, other luxury brands have confirmed they're following suit, as Barron's predicted.

But most are still struggling to work out just how much they can raise prices without alienating consumers.

Italian luxury conglomerate Prada Group said on Wednesday it plans to raise prices in the summer. While it hasn't yet decided what the increases will be, executives hope they will have a better understanding of the tariff environment by June, which will let them move forward.

"We will have to do certain things on pricing, for sure, but I do not know exactly the amount today," said Prada CEO Andrea Guerra.

If the tariff rate remains at around 10%, Prada executives expect price increases will likely be in line with their periodic raises, which often range from 2% to 4% every six months or so.

"The maintenance type of increases of which Andrea [Guerra] spoke earlier about would be enough to compensate, but the point is, the impact that matters the most and is harder to quantify is the one on consumer confidence and mid- long-term on the economy," said Andrea Bonini, Prada's chief financial officer.

Kering executives made similar comments about needing more clarity on trade policy when the company reported earnings last week. They added that they will be tracking consumer confidence in the U.S. and globally to determine how much they can increase prices.

"We are, of course, monitoring the situation, and we'll reassess our action in around May with the delivery of the new collection," said Francesca Bellettini, Kering's deputy CEO.

Kering may have a harder time raising prices than peers like Hermès or Prada. Sales and demand for goods from the other two have been stronger in the past couple of years.

Gucci, Kering's biggest brand, is in the midst of an ambitious turnaround that has yet to take hold. Foot traffic at its stores was weak in the first quarter and executives expect sales will remain soft throughout the first half of the year.

Write to Sabrina Escobar at sabrina.escobar@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

May 03, 2025 05:00 ET (09:00 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.