Miami Herald

Miami Herald, The (FL)
as provided by The McClatchy Company

April 1, 2012

Lightly used luxury: Pre-owned handbags are hot sellers
Hallandale-based LuxeDH finds a profitable online niche in a booming market.

Author: Ina Paiva Cordle, icordle@MiamiHerald.com

Article Text:

Matching women with their dream luxury handbags has become a winning proposition for a Hallandale-based online firm.

LuxeDH — short for Luxe Designer Handbags — specializes in selling pre-owned, high-end labels like Chanel, Louis Vuitton, Gucci, Fendi and Balenciaga, with prices ranging from $99 for a Fendi pochette to $3,600 for a Gucci Galaxy Python.

The bags are sought after by women who want a symbol of luxury but at a fraction of the new price, said Roberto Szerer, the company’s president and owner.

“People like to show off,” Szerer said. “It’s a lifestyle.”

Launched in 2010, LuxeDH (www.luxedh.com), has grown to 100,000 unique visitors per month on its website, Szerer said, and sales are ratcheting up.

The handbags are displayed on the site, showing any damage, stain or scuff. They are categorized based on their use, as new, nearly new, gently used and well worn.

“Ninety-nine percent are in excellent condition, pre-owned and pre-loved to a small degree,” said Michael Jacobs,! chief of operations.

The company focuses on only about 11 luxury brands — those that are the most recognizable, including also Chloé, Marc Jacobs, Dior, Bottega Veneta, Hermes and Prada.

Most bags are 40 percent to 60 percent off the price of a new bag, though some are 20 percent to 30 percent off if they are hard to find, Szerer said.

LuxeDH takes care to authenticate each bag by at least three people, who look for such details as stitching, craftsmanship, fonts on logos and hologram stickers.

The bags are also cleaned and conditioned before they are mailed with their certificates of authenticity.

Customers can nab a like-new classic Chanel Maxi Jumbo for $2,200 that retails new for about $5,000, for example, or a gently used Louis Vuitton Montorgueil for $699 that retails new for about $1,000.

“You have the status on your arm, but its affordable,’ said Sabina Jacobs, chief authenticator and Michael Jacobs&rsquo! ; wife, who admits she is “obsessed with handbags.&rdquo! ;

LuxeDH finds its bags anywhere, including consignment shops and liquidators, though Szerer said the primary source is its own website, which advertises for bags, and allows potential sellers to upload photos.

Overall, about 70 percent of its purses come through its website; 15 percent are brought to the company’s offices, and the other 15 percent are found when LuxeDH’s employees go directly to sellers’ homes, he said.

Recently, a woman brought in a load of 54 handbags, and the company bought 30, Szerer said.

“Once you buy from one woman, they get so excited that they can convert handbags into money, they come again and they tell their friends and they tell their family,” he said.

The company gets new inventory nearly every day, and sends out emails to customers showing its new stock. About half sell almost immediately.

“We have groupies,” Szerer said. And many customers are repeat buyers, including one ! who recently bought 14 bags.

Customers can also request bags, and the company will try to find them from its base of clients and other sources. Szerer said they get 10 to 15 inquiries a day.

“It’s like a handbag club, said Kimberly Blue, director of sales and client relations. “It’s fun.”

Without a doubt, used luxury handbags are in hot demand, said Marshal Cohen, chief retail analyst for the NPD Group, a consumer and retail market research firm.

Luxury purses rose to prominence before the recession, when middle-income and higher-income women were “grabbing everything they could, and price was no object,” Cohen said. “It was all about carrying your status in life: Guys buying fancy cars, girls buying fancy bags.”

Yet, in the aftermath of the recession, luxury has taken a new twist.

“The aspiration of the middle-income consumer, who had the taste for luxury when times were good, d! idn’t lose their taste,” he said. “They just! had to find a new way to appease their interest.

Enter used handbags.

“No one asks you where did you get the bag? When did you get it?” Cohen said. “So, it isn’t buying somebody’s leftovers, it’s giving the ability to the middle incomes to return to the luxury game.”

Take Yvonne Franco, an assistant controller for a high-end home goods company in New York who always considered a new Chanel purse out of her league.

When she stumbled upon LuxeDH while searching for a used bag, she said she “lucked out.”

A self-professed “bag junkie,” she said that in the past three months she has purchased four bags from LuxeDH— three Chanels and one Louis Vuitton, totaling $4,000.

“I couldn’t believe the prices, I couldn’t believe the beauty of the bags,” said Franco, 39. “I couldn’t resist just buying one, I had to keep buying.”

The fact that th! e bags aren’t new is invisible to observers, she said.

“Nine out of 10 people who see me with my bag have no clue it is pre-owned,” Franco said.

Inside LuxeDH’s nondescript offices, there are racks of high-end handbags and plain brown-papered boxes piled high, each with code numbers to delineate their contents.

The company offers free shipping in the United States, and charges to ship internationally. LuxeDH also offers refunds and a buyback program, as well as payment plans up to six months, which allow the bag to be shipped after the first installment, Blue said.

The company, with 12 employees, generated between $1 million and $2 million in revenue last year, said Szerer, who estimates reaching $4 million to $5 million this year. He declined to disclose profits, but said the company is profitable. By the end of the year, he hopes to be selling 600 or 700 handbags per month.

The company’s main competition is eBay,! along with some other sites. Bag Borrow or Steal, which built! its onl ine business lending bags, has begun to sell, also. Szerer said he looked into lending out bags, but decided it was “a great idea but not sustainable.”

Szerer, who was born in Colombia and moved here 14 years ago, has a business background in housewares, packaging and retail. He was the co-founder of a Miami-based business that held the licenses in Latin America for Disney, Warner, Mattel and Converse kids’ shoes.

Szerer sold that business five years ago, and began looking for a new opportunity “to give people luxury at a lower price.”

He started with an online distribution for Lavazza coffee, but asked his staff for more ideas. Michael and Sabina Jacobs came up with 10 suggestions, and the last was selling handbags.

“My business brain said: ‘Amazing, great idea,’  ” Szerer said. “We have an expert in handbags. Let’s do it.”

Soon, he closed the Lavazza site.

“We decided to concentrate on handbags,” he said. “And since then, we’ve been growing exponentially.”