Yahoo Finance Rebag CEO sees 'tension' in luxury market
The luxury market has seen many ups and downs over the last year. Charles Gorra, Rebag Founder and CEO joins Yahoo Finance Live to weigh in on the firsthand luxury and resale market.
Gorra says that less spending in the firsthand luxury market directly impacts the resale market, noting “we [resale retailers] are a consequence of some of the trends that you see in the firsthand market.”
Gorra notes “tension” of softer demand, increased customer acquisition costs, more competition and channels for selling, which leads to some players being drowned out.
For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.
Video Transcript
- Are you in the market for luxury goods? Based on the year that luxury giants have been having, you probably are. But maybe it's time to buy a luxury as an asset.
In Rebag's annual clear report out today, some luxury products have retained, or even grown in value over the last year. And for more on this report, Charles Gorra, Rebag CEO and Founder, he is here today. And thank you for joining us.
Just your firsthand, I guess, 50,000-foot view of the luxury market this year. I was making some comments that they were kind of toe-and-toe with the Magnificent Seven. But demand kind of fell off. What's your take on the resale in the US?
CHARLES GORRA: Hey, good morning. Glad to be here. I would say, to some extent, the resale market is a reflection of the luxury market. And you kind of have to converse trends to two opposite trends in this market. You have-- you know, if things slow down on the luxury first-hand market, it means-- you know, consumer-- there's more tension on consumer there.
And so, maybe there's someone, you know, on our end of the resale world who's finding essentially access to a cheaper version of that product. So that's some of the dynamics that you can see. And you also see the reverse, which is if things are tense, you know, at people's budgets, et cetera, you can see a lot more sellers. So you are-- you are-- you know, we are a consequence of some of the trends of-- that you see in the first-hand market.
- I'm curious when you think about the luxury market more broadly. How you're thinking about some of the headlines that we've heard recently about the other players in the space. I'm thinking Farfetch, for example, considering going private after sales just haven't stood up to the degree that they were coming out of the pandemic, when we saw a lot of spending in this space. How much does that concern you about the longevity of your business moving forward?
CHARLES GORRA: I mean, it's certainly problematic for the whole space. I would say Farfetch is-- you know, they're more in the firsthand world. But, you know, we are also part of that digital luxury world. And, you know, it's obviously easier for us if everyone succeeds.
I would say Farfetch is-- you know, a lot of the Farfetch stories and international story that has to do with China, and a lot of geographies that, you know, were not directly impacted with. And frankly, they've had their own problems of, you know, taking the company in many, many directions. So I would say not directly related.
But you're right. What is common is there are some tensions in what you could call unit economics, right? And some of that is-- for the last two years, you have a combination of softer demands.
You have a lot of combination of more competition. You have a combination of increasing customer acquisition costs for a lot of digital players. And you have, you know, more channels available for luxury, you know, companies. So I think all of that put together makes it more difficult for everyone to stand out. And you have to find, you know, a way to get this done profitably.
