Rebag raised $25 million in third round of funding for their Handbag Heaven. Rebag purchases luxury handbags from their owners and resells them online and in boutiques in New York and Los Angeles. The Series C round of funding will help Rebag hire and train new employees, expand their retail stores, and their Rebag Infinity program.
Rebag carries every major in-demand luxury handbag label, including Hérmes, Celine, Louis Vuitton, Gucci, Prada, Chanel, Fendi, Goyard, and more. With three locations in New York, (in SoHo, at Billionaire’s Row, and inside the Westfield World Trade Center), and two locations in Los Angeles (on Melrose Avenue and in Beverly Hills), Rebag has plans to expand across the United States over the next three years to open up to 30 more stores.
Rebag’s brick-and-mortar locations have become known on Instagram for their “Birkin Walls” that boast about 30 to 40 of the iconic Hérmes Birkin handbags, which is a genius retail marketing idea. Millennials flock to their stores for photo opportunities and, potentially, walk out with a purse.
I’m particularly interested in the Rebag Infinity program, which allows customers to purchase a new handbag and resell it to Rebag within six months for 70 percent of the purchase price, which claims to “give them the freedom to rotate a new luxury handbag in and out of their wardrobe every season, thus providing a sustainable and economical way to indulge,” which sounds like a fancy way to explain “if you don’t like it, we’ll buy it back from you.” It’s actually a pretty common practice in the resale industry to encourage customers with a “Buy Back” program (Fashionphile and Yoogi’s Closet offer the same), but Rebag has chosen to market it as a special program. It’s a good tool to encourage customers to keep coming back to their site.
Like all resellers, Rebag takes authenticity of each item very seriously. Rebag practices a meticulous multi-step authentication process in each store, where various points of authenticity are verified with each handbag that has been brought in. Fakes, which are illegal to buy and sell, are discreetly declined.
Where I’m concerned here is how their employees are trained to authenticate and how much customers can trust Rebag on authenticity. I trust that they try their hardest to make sure every item is authentic, but there are a lot of really, really good counterfeits out there.
That said, Rebag has still managed to create a profitable omni-channel business model and has cornered the luxury resale industry. Here’s how:
Where Rebag first succeeds is in their name. It reminds me of ‘ol green trifecta: reduce, reuse, and recycle, which is essentially what they’re doing with handbags.
For customers, the resale industry unlocks the possibility of owning high-end designer fashion will last for many years to come in comparison to fast fashion. In addition, premier luxury handbags hold value like a car does, meaning it can be bought and sold after use at any condition, depending on the market.
The resale industry is worth about $20 billion, according to ThredUp’s 2018 Resale Report. Rebag competes with other popular resellers like Yoogi’s Closet, TheRealReal, and Fashionphile. In July 2018, the RealReal (a consignment-based reseller) raised a $115 million in Series G funding, bringing the total raised in private equity capital to $288 million.
I’m excited to see how Rebag expands, and they have a really good opportunity to really take hold of the marketplace and define a category that’s combines luxury shopping and thrifting.
Contrary to popular belief that only super rich, old ladies buy fancy bags, millennials are actually the largest buyers in the pre-owned luxury handbag category. This is lucky for Rebag because they’re able to sell both online and in brick-and-mortar stores.
This omni-channel approach creates an experience that’s perfect for selling to millennials. Millennials, sometimes referred to as The Instagram Generation, are online constantly and the digital marketing needs to continuous engage with them, but also drive them towards memorable experiences (and sometimes to make sales). The “Instagram It-Girl” is Rebag’s ideal customer.
It’s never been so easy to buy luxury goods. Rebag only makes it easier.
Though I’m not affiliated with Rebag, I feel obligated to report on this news because it’s big for this industry. Any time serious money is being thrown at retail ventures, especially in the resale industry, I’m both excited and skeptical. With 8 years of experience in the resale industry, the landscape has changed dramatically. There have been a lot of companies that have tried to conquer the resale industry and many have failed. All it takes is one company to be extremely successful in this market.
Will it be Rebag?