The luxury resale market is booming in Canada
[May Berthelot (@maymaryb), is wearing a Zara blue bombers jacket featuring a flower and a bird, Topshop blue jeans, H&M sandals, a Cartier Pasha watch, Sarah Lavoine sunglasses, and a Chanel gray bag, during a street style session, on July 27, 2016 in Paris, France. (Photo by Edward Berthelot/Getty Images)]
Ten years ago, a brand new classic Chanel flap bag cost $1,600; today it sells for nearly four times that at $6,300. It’s a key example of why the Canadian luxury resale market has seen major growth in the past decade.
“For some people it’s a good investment,” explains Alice Goldbloom, founder of Montreal-based online luxury handbag reseller Love That Bag. “Someone who would have bought a bag ten years ago at Chanel is selling it for more than what they paid.”
Currently, that same bag is going for $3,990 on the site, which Goldbloom launched four years ago after noticing the growth of resellers south of the border.
“When I started I literally had no competition,” says Goldbloom. “Today, it’s a multi-million dollar business.”
Worldwide, the luxury retail market has grown to be worth $369 billion in 2015. That same year, the market for used luxury bags, watches and jewellery hit $17.5 billion, according to a study by Bain and Altagamma, an Italian group representing luxury goods manufacturers.
It’s the same trends that prompted Lauren Baker, who founded Lab Consignment in Toronto as a pop-up in 2009, to move online and expand her goods from only selling contemporary designers to accepting and reselling gently used luxury goods.
“When the market fell out, I knew those people were going to need to resell them and get some money in their pockets and people would want to buy resale to help save money,” she says adding that since 2009, Lab has sold 8,000 items from 600 consignors.
Lauryn Zhukrovsky, who runs Calgary-based online luxury consignment website theupside.ca, says she noticed a similar spike in interest in both reselling and buying previously used goods.
“I read we’re in the biggest recession in Alberta’s history, so people who otherwise would have left their stuff in the back of the closet, they definitely want to see some money back from what they’re not using,” she says. “And we provide a much higher percentage back than traditional brick and mortar consignment services.”
Shoes and handbags hold their value longer compared to clothing.
“If you had bought a Birkin bag or a Chanel bag ten years ago you would have had a better return on your investment than any money market,” she says. “It’s an investment, not just a fashion piece – especially Louis Vuitton, Chanel and Hermes – these brands go up in price every single year, sometimes 20 to 30 per cent .”
Of course, that’s if you show your luxury goods respect from the day you leave the shop with them, says Baker.
“Take good care of them – don’t throw loose makeup in your handbags, don’t rest them on the ground, always keep them stuffed in dust bags when not being used… that way the resale value elevates,” she says.
Stopping the fakes
Granted, your goods are only worth as much as some will pay for them and with the resale market swelling in size, there’s an inundation with sellers flocking to eBay and Facebook marketplaces. Unfortunately, says Baker, this creates fertile territory for fakes.
“I’ve only let one fake slip through my fingers in seven years,” she says, explaining that it’s the worst feeling.
Zhukrovsky agrees, pointing out that the challenge of counterfeit handbags was enough to cause problems locking down a payment processor when she first started.
“We had a hard time finding one [who would] work with us because of the risk – I didn’t even think about that,” she says. Theupside.ca has since hired an authenticator with 15 years experience in the luxury industry to ensure products sold on the site are authentic. It’s vital, considering the company has around 3,000 items in its warehouse at any given time.
“Our first six months of being launched we probably got 50 emails asking ‘how do I know it’s authentic?’ ” she says. But consumers are slowly coming around to the idea that for online resellers focused on the luxury sphere, authenticity is never taken lightly. “That’s something eBay can’t provide.”