Rebag has made a giant enterprise out of promoting previous purses.
The luxurious resale platform — now with seven shops throughout New York, Miami and Los Angeles — has taken a complete of $68 million in funding over the past seven years and is now utilizing these money reserves to propel itself to the following stage in time for the post-COVID-19 purchasing period.
Rebag considers itself a premium resale platform as a result of it pays for used items upfront relatively than engaged on a peer-to-peer or consignment mannequin. The firm was based in 2014 by Charles Gorra, previously of Rent The Runway and funding banks like Goldman Sachs.
Gorra says that key to driving new enterprise in the present day just isn’t one-upping resale rivals like The RealReal, however relatively harnessing the facility of unused property in purchasers’ wardrobes. “Our main belief is that we compete against idleness — that’s our main competition. We believe right now that only 10 percent of luxury goods owners actively sell on the secondary market. That means 90 percent of owners do not sell anything and we think it’s largely because of convenience, so we are here to focus on building a convenience that attracts sellers and customers,” he mentioned.
Gorra famous that Rebag’s gross sales grew 50 p.c over the past 12 months, notably as ladies appeared to deal with themselves with luxurious items that they perceived to have lasting funding worth. He tasks that over the following two years, the corporate will develop an estimated 2.5 instances its present measurement. Currently, the Rebag’s common order worth is about $2,000. While shops are necessary commerce facilities, Rebag’s website represents nearly all of firm gross sales.
Gorra feels that luxurious shoppers, notably these with a substantial stock of products, need their handheld as a lot as doable all through the resale course of. To supply one other layer of service, Rebag launches a proprietary AI Clair Trade program in the present day that sellers can use from the consolation of their very own properties.
By photographing a bag, Clair Trade will mechanically estimate its retail value. If the vendor is interested by shopping for one other product on Rebag’s platform, it should mechanically tally their remaining invoice by subtracting the price of their items from their cart’s sticker value.
“It enables more of a circular mindset to buy and sell in one transaction,” Gorra mentioned of this system’s potential. Ultimately it may very well be a boon to Rebag’s backside line, as a result of as Gorra famous — “the reality is that the secondhand market is supply constrained.” Currently he estimates the corporate has a listing of about 25,000 luggage.
“It’s about — how do you convince someone to part with a beautiful item instead of keeping it. In order to do that we pay them a certain value upfront. It’s a seamless process that removes friction for sellers. Our core business idea is the value of time. In our stores, for instance, we will buy any product within 15 minutes — it creates supply when we make it that easy,” Gorra mentioned.
When buyers are supplied a gross sales quote, they’re at all times proven what p.c it represents of Rebag’s retail value. “That’s important to help customers benchmark themselves versus the retail value,” he mentioned.
In the time since Rebag’s founding, secondhand purchasing has — as Gorra famous — “become mainstream.” He feels that, notably with purses, there are two major classes of secondhand buyers now essential to the market’s success.
“It’s still resilient — this idea of resale as a way to get into luxury in more affordable way. It’s that proxy, especially for accessories, that is attracting a lot of customers,” he mentioned.
But there may be more and more a subset of prosperous prospects who need one thing nobody else has — an excellent uncommon, limited-edition Louis Vuitton or Chanel bag from the early 2000’s, for example. “It’s a small part of the market that I would say is more of an exception than the norm,” Gorra mentioned. But it’s this group of people that more and more affect first-time secondhand buyers from the aforementioned class to discover the world of pre-owned vogue items.
What the 2 teams do have in widespread is an consciousness for the surroundings. “I think a few years ago the notion of sustainability was nice to have, but if you fast-forward six years we are in a market now where sustainability is a priority for consumers and therefore it’s become a priority for brands,” Gorra mentioned.
Also key to rising Rebag’s enterprise over the following few years is a latest growth into timepieces and superb jewellery, which Gorra estimates might develop into 20 p.c of general gross sales. But he doesn’t foresee any future curiosity in footwear or the bigger attire class. “Our positioning is very specific. A lot of the other companies are trying to address a larger share of the closet than we are,” he mentioned, noting that business-wise purses and jewellery are notably interesting as they don’t seem to be size-restrictive and take up minimal cupboard space.
Overall, he feels that the purse market has begun biking again to colourful traits and away from the extra pared-back funding items that bought through the pandemic. “I think when we are talking a Chanel bag, Louis Vuitton, an Hermès Kelly, maybe you don’t have a way to showcase it immediately [during the pandemic] but if you take long-term stock of bags, it’s a good chance that they will still be sought-after in a couple years so in a way these long-term minded purchase were pretty resilient during the pandemic,” he mentioned.
This drove up the price of basic luggage that, because of manufacturing constraints, have been almost inconceivable to come back by on the retail market. Louis Vuitton’s basic Pochette bag, for example, stays bought out throughout the corporate’s U.S. shops. Its resale worth now exceeds the bag’s $790 price ticket and is buying and selling for about $960 on Rebag.
“The Pochette right now we are paying double what we paid sellers a year ago. Especially the limited-edition styles. The retail price doesn’t reflect that, they are so hard to find that growth in the resale market has outsized any price increase,” he mentioned.
But whereas the basic Pochette stays scorching, Gorra mentioned different investment-minded traits from the pandemic “are already starting to reverse. Maybe it’s seasonal for summertime but we are seeing more color and limited-edition things create a lot of excitement.” Louis Vuitton’s By the Pool assortment stays among the many hottest luggage of the season, he mentioned.