This week, a deep dive into the strategy behind the new, obstacle-filled path to a Neverfull purchase. Scroll down to use Glossy+ Comments, giving the Glossy+ community the opportunity to join discussions around industry topics.
“Everyone and their ma has a Neverfull,” said Reddit user curlygirlfl, discussing the future of the bag in the r/handbags subreddit last month. In today’s luxury environment, where scarcity increasingly equals desirability, that’s less than ideal for Louis Vuitton.
Louis Vuitton, the leading luxury fashion brand, quietly launched a waitlist for its classic, ubiquitous Neverfull styles in March. That includes the coated canvas tote in the brand’s signature monogram and checkered prints, as well as the embossed leather versions. Though recently available to readily purchase on LouisVuitton.com, these styles’ product pages now show a “Notify Me” button where “Place in Cart” once lived. The brand’s limited-edition Neverfull styles, however, can be purchased immediately.
The change sparked rumors that the brand may be discontinuing the Neverfull, with speculation spreading across TikTok, online handbag forums and beyond. The trending topic “louis vuitton neverfull discontinued” has 11.8 billion views on TikTok, as of Thursday. Many people took “Notify Me” to mean that the styles had sold through their final production runs. However, the update instead reflects a shift to a waitlist selling model for the style. That was confirmed this week by a client services representative answering a call to a Midwest Louis Vuitton store. Shoppers wishing to purchase a Neverfull must join a waitlist either in-store or online — the latter, by entering their email address. The waitlist, as it stands, is 2-3 months, according to the representative. At the end of the waiting period, the customer has 24 hours to purchase their bag, which must be done in-store. Louis Vuitton declined to provide further comment.
After an era of luxury brands working toward inclusivity in a bid for Gen Z, the pendulum is swinging back to exclusivity. Appealing to ultra-high-net-worth shoppers less impacted by the turbulent economy is the current focus.
For its part, Hermès has drawn much buzz around its controlled accessibility to its handmade Birkin and Kelly bags, for which the demand far exceeds the supply. The strategy is proving effective, with the company’s market capitalization besting Nike’s, the leading fashion brand based on revenue. Hermès is reportedly the third-largest luxury fashion brand, in terms of revenue, and the No. 1 most profitable. Chanel, the No. 2 brand, has also prioritized exclusivity, only selling its handbags through its stores. In 2022, it announced that it’s opening private boutiques for its top-spending customers.
While luxury’s rapid growth in the last few years has slowed, the market remains on the upswing. Louis Vuitton owner LVMH reported in January that revenue for its Fashion & Leather Goods category was up 70% in 2022, compared to 2019. That was driven mostly by Dior and Louis Vuitton, said LVMH CFO Jean-Jacques Guiony. Also in 2022, Louis Vuitton reached €20 billion in revenue for the first time.
Like other handbags by Louis Vuitton and competing luxury brands, the Neverfull tote has seen a series of price hikes in recent years. According to Cynthia Houlton, global head of fashion and accessories at Sotheby’s, the bag, which is now priced at $2,030, retailed for $870 in 2012. And the “most aggressive” increases were in the last five years. The Neverfull’s price reportedly increased by 20% from 2021 to 2022.
As Houlton sees it, with the waitlist, Louis Vuitton wants to create more exclusivity, she said. It also seeks to increase the sales of its other bags, particularly its limited-edition and higher-priced leather styles.
“They don’t want their business to be Neverfulls,” she said.
According to Javier Gonzalez Lastra, CFA, portfolio manager of investment fund Tema Luxury ETF, investors in LVMH have recently been concerned that the company will “become a victim of its own success,” in that its products will become too popular, degrading the brand’s status.
The waitlist will create urgency around limited-edition Neverfulls, which typically cost only slightly more than classic versions, said Sarah Davis, founder and CCO of luxury handbag resale company Fashionphile. Currently, a limited-edition Nautical version is selling for $2,370, or $340 more than a classic.
“The [limited-edition styles] are gonna go away, and then you won’t be able to get that — or any other Neverfull style,” Davis said, predicting the perceived urgency among shoppers. “[The strategy] mirrors drop culture, which remains of very high interest. And it’s going to drive 100% sell-through of those [limited-edition] styles, at a time when every brand is worried about overproduction and too much supply.”
Houlton echoed the sentiment, stating, “Luxury brands are still in the driver’s seat, in terms of supply and demand.”
Limited-edition Neverfulls have successfully driven sales for years, Davis said. Way back in 2007, a version that was part of a collaboration between Louis Vuitton, Takashi Murakami and L.A.’s Museum of Contemporary Art immediately sold at resale for higher than the retail price.
Houlton said she anticipates high search volume for the Neverfull in the near future, as more people realize they can neither immediately buy one nor complete a purchase of the style online. “It’s crazy that they require you to go to a store; not everyone lives near an LV store,” she said.
Still, she said, Louis Vuitton losing clients or market share is unlikely. “These bags are the most popular and have the highest sell-through of any of the brand’s styles. Even though they’re raising prices and making it hard, a lot of women will still want this bag as their work tote, beach tote or everyday bag”.
Another perk of a waitlist, for any brand, is that it allows them to build relationships with customers, said Gonzalez Lastra. For Louis Vuitton, that includes creating “customer intelligence” about the brand, with the waitlist process requiring shoppers to go into a store and talk to a sales associate. Secondly, a waitlist requires the customer to provide their contact information, granting the brand the opportunity to sell them additional products.
All sources contributing to this story said that the price of the Neverfull is set to skyrocket in resale channels, as a result of the new retail purchase parameters. Houlton said she’s surprised that it hasn’t happened already, considering the online chatter — especially as many people won’t want to wait or travel for a bag. And, because there will be a lower quantity of the bags in the market, people who get their hands on one will no doubt want to sell it at a premium.
“We anticipate a surge in demand and accelerated sell-through rates, ultimately driving up prices,” said Charles Gorra, founder and CEO of luxury handbag resale company Rebag, comparing the sales behavior to that of Hermès Birkins and limited-edition styles. “The scarcity of the piece amplifies its allure and fuels the sense of urgency among collectors.”
On the same note, Gonzalez Lastra said, “I would advise you to buy one now.”
The Neverfull is already a hot resale item: It’s been Rebag’s top-performing and top-searched Louis Vuitton bag since the start of the year. It’s ranked second overall, only following the Hermès Birkin. At Fashionphile, different sizes and styles of the Neverfull are peppered throughout the list of its top-selling bags over the last six months, including placement at No. 7, No. 11 and No. 13.
Davis noted that Chanel’s discontinued shopping tote is also a popular style at Fashionphile. And, overall, iconic shapes that have been around for decades are consistently among best-sellers.
“We’re an invisible partner of the luxury brands; resale is part of that whole ecosystem,” Davis said. “Any brand that doesn’t have a good retail-to-resale ratio is just not a good brand. The better the brand is, the closer the prices — and the crème de la crème of brands sell for even higher than retail.”
She added, “The brands need us to reinforce their brand value by selling their products for close to retail [prices]. … A brand couldn’t pay for all the awareness around Hermès being a good investment [thanks to its bags’ resale prices]. And for LV, Neverfull prices are going to continue to go up [at resale], which will look really good for them.”
Currently, The Neverfull, launched in 2007, holds a 91% resale value, on average, according to The RealReal.
Davis theorized that, as they are simply “a big piece of canvas and a couple of straps,” Neverfulls likely have higher margins than most Louis Vuitton bags, despite their comparatively lower price points. And the margins are set to see a boost.
“As Louis Vuitton increases exclusivity, it’s creating an aura around the Neverfull and a deep desire for it,” said Gonzalez Lastra. “That will increase their pricing power. Higher prices in luxury can create higher desirability, which increases the demand, which increases the price. It’s a fantastic positive feedback loop.”
He added, “By design, luxury goods companies aim to achieve this status. … You don’t just walk into a dealership and walk out with a Ferrari.”
Houlton said she expects Louis Vuitton to extend the waitlist strategy to all of its coated canvas bags, including its Speedy styles.
“This whole idea of scarcity is very important in luxury,” she said. “It’s here to stay because there are just so many benefits to the brands; creating scarcity allows them to increase prices even faster. … And the statement they’re making is that they’re OK with the fact that their bags aren’t accessible to everyone.”
Of course, not all brands could successfully pull off such a disruption to their sales model.
“Another brand could try the same strategy and then realize its brand power is not strong enough,” Gonzalez Lastra said. “Giving the consumer limited access [to a bag] could lead them to say, ‘Fine, then I’ll go buy the Gucci one.’”
But, for Louis Vuitton’s part, he said, “They’re probably in possession of a lot of data that allowed them to make this decision with a good degree of certainty.”