Keeping up with fashion trends can feel a lot like keeping up with the Smiths, but certain luxury items will stay in fashion forever – especially if they are coveted products like the Hermes Birkin. So, Rebag has taken this mentality and translated it into a thriving “seller-first” destination for buying and selling luxury handbags. Rebag is different than consignment shops because it buys handbags outright with an upfront payment, and sellers can easily submit their bags – either in stores or through its app- and receive a quote instantly. This luxury handbag destination is expanding its presence through its retail stores called “Handbag Heavens”, currently 5 locations in LA and NYC, with plans to open an additional thirty.
AlleyWatch interviewed founder Charles Gorra to discuss the trajectory of building a seamless platform for buying and selling luxury handbags, the company’s expansion into brick and mortar, and its latest fundraise. Rebag has now raised a total of $53M across five rounds.
Who were your investors and how much did you raise?
We’ve just closed our Series C round, raising $25M. The round was led by Novator, with additional funding from General Catalyst and FJ Labs.
Tell us about the product or service that Rebag offers.
Rebag is the destination for buying and selling luxury handbags. Our model was conceived with a seller-first mindset, complete with simplicity, transparency, and immediacy: factors that consumers expect from a luxury business. Unlike consignment or peer to peer alternatives, we buy luxury handbags outright with quick and upfront payment.
Sellers can submit their bags in stores for both a quote and payment in less than 60 minutes, or they’ll receive a quote within 1-2 business days when they submit online or on the app. For online submissions, sellers will receive payment within 2-3 business days after their bag passes our in-person vetting process.
For those looking to add to their collection, buyers can shop thousands of bags from 50+ luxury brands, all vetted for quality and authenticity, both online and in stores. Shopping at Rebag allows our customers endless access to handbags, since any Rebag purchase can be exchanged within 6 months for credit worth at least 70% of its purchase price. Buying and exchanging with Rebag Infinity allows our customers to constantly refresh their handbags as they see fit, season after season.
Would you tell us about the decision to go from digitally native to opening brick and mortar locations?
Expanding into brick and mortar was a natural progression for us. With our seller first mindset, our goal is to cater to our customers wherever they are. Opening physical retail locations allows us to provide both our buyers and sellers with more options, and to bring to life the Rebag experience and brand in a way that digital could not.
How has expanding into brick and mortar impacted your brand?
Our customers visit the stores to discover handbag heaven – when they find something they love, they can purchase it on the spot and walk out with it.
If they don’t find their dream bag in that particular store, they can search our site, purchase an item, and have it shipped directly to their door. If they are looking to sell, they can visit the store with their bags to sell at the Rebag Bar and receive an upfront payment in less than 60 minutes. Customers want options, including the opportunity to touch and feel bags before investing in a high price point purchase, and a luxurious in-store experience; by expanding into brick-and-mortar, we can deliver that.
What inspired you to start Rebag?
I was born and raised in Monaco, an epicenter of luxury fashion. Over time I witnessed luxury consumption and the behavior that comes with it. High-end goods are pieces of art – consumers indulge in the brand-new releases and collect them for their beauty, wear them for a few months, then tuck them away into their closets only to be forgotten. These memories came rushing back when I worked at Rent the Runway, the first company of its kind that was changing the consumption of fashion.
Having visited hundreds of luxury customers and toured their closets, I discovered that many had vast amounts of unused goods taking up valuable space with little to no motivation to sell them. I saw a large need in the luxury market for a transparent, fair, and sustainable model to easily sell and buy luxury goods, and so Rebag was conceived.
How is Rebag different?
Rebag is about immediacy and effortlessness: you can sell your bag seamlessly and instantly at competitive market prices. Other resale options are often time-consuming for the seller: the process itself is complex and lengthy, lacks transparency, and is based on the slow-moving consignment model. Unlike those platforms, we are consignment-free and offer upfront payment. In a world where luxury consumers want immediacy, we offer a simple way to sell luxury bags instantly with just your phone. On the other end of the spectrum, buyers looking for their next bag at Rebag will discover a treasure trove of gems at competitive market prices. By working directly with tens of thousands of closets, we have access to the best of the best: from the most classic, iconic handbags, to otherwise difficult-to-procure styles like the Hermes Birkin, limited edition styles, and vintage pieces. Ultimately, shopping for a Rebag bag will always reap you a unique handbag, that is not only beautiful but competitively priced for the resale market and stringently vetted. We own every single item in our inventory, and they have been thoroughly inspected by our team of experts for quality, condition, and authenticity.
What market does Rebag target and how big is it?
US luxury goods consumers drove $13B in luxury accessory sales in 2017 with the market growing over 7% per year.
Across the US, Rebag estimates that the cumulative present value of the closets of all luxury handbag owners adds up to $50B– meanwhile, only 10% of these luxury consumers are actively participating in the resale market. Rebag’s aim is to simplify the resale process to increase the overall inventory of luxury handbags on the secondary market.
What’s your business model?
First and foremost, Rebag puts the seller first by purchasing handbags outright for fair, competitive market prices. To make this possible, we’ve developed a set of algorithms to determine the secondary market value of handbags. Just like the stock market, the resale value of handbags is mostly a function of supply and demand. We constantly monitor those trends in order to determine our price points. We aim to always provide competitive quotes to our sellers, while at the same time ensuring attractive price points for our buyers.
What was the funding process like?
This round came together very organically. Since our Series B, Rebag has experienced strong traction and that facilitated the discussions with investors. We are privileged that many of our investors have believed in us since the beginning and reinvested in multiple rounds. Novator, who led this current round was also part of our Series B. Likewise, General Catalyst and FJ Labs reinvested in this round and were investors in all previous rounds.
What are the biggest challenges that you faced while raising capital?
Our Series C is more of a growth round than a venture capital round. Given our current size, the focus while raising capital was on the long term and our ability to scale while at the same time creating attractive economics for the business. Therefore, we had to justify a high growth trajectory while also making sure that we are efficient with our resources.
What factors about your business led your investors to write the check?
The luxury resale market has yet to be tapped to the fullest. Rebag estimates that only 10% of luxury consumers are actively participating in the resale market. We’re identifying why this is – and mainly the reason is because it’s just too complex to engage in – and regularly building technology to make resale more transparent and accessible to luxury owners.
There is also a circular economy at work here that Rebag is strengthening. We created a platform where luxury handbag lovers come to buy and sell. We’re targeting established luxury owners that rotate out their once-loved designer pieces to Rebag, for money to put toward newer styles; meanwhile, we’re introducing new customers into the luxury market with our accessible price points and wide range of inventory – eventually, these buyers will become sellers themselves, and more buyers will come after them.
After analyzing this cyclical behavior, we developed and launched Rebag Infinity in October 2018 to best support this consumer demand for luxury handbag ownership with added flexibility. With Rebag Infinity, they can buy a Rebag bag, carry it up for up to six months, then exchange it for credit worth at least 70% of its purchase price. It’s because of initiatives like this that make Rebag the ultimate destination for luxury handbags, a business that our investors strongly believe in.
What are the milestones you plan to achieve in the next six months?
Ambitious plans are in the works. Since launching our first store in New York in 2017, the feedback and customer activity has been absolutely incredible.
We plan to expand our retail footprint and head into major cities and metropolitan areas across the US that have a large interest in luxury goods. Even more exciting is how we plan on using our years worth of accumulated data to further develop our proprietary pricing algorithms. Pricing is the pillar of our company – we always aim to provide a price that is appealing to the seller, while still remaining attractive enough for the next buyer.
We plan to expand our retail footprint and head into major cities and metropolitan areas across the US that have a large interest in luxury goods. Even more exciting is how we plan on using our years worth of accumulated data to further develop our proprietary pricing algorithms. Pricing is the pillar of our company – we always aim to provide a price that is appealing to the seller, while still remaining attractive enough for the next buyer.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
Creativity, efficiency, and ambition are what drive Rebag forward in growth, ever since our launch in 2014 – we hold onto our startup mindset, because it’s important to be smart with the resources you have, and to learn how to do a lot with little. Even though it’s intimidating, set ambitious goals and use that as a benchmark.
Something I always tell myself and my team is to “stay hungry.” There is always another goal, another level to strive for, and this helps keep us humble and grateful.
Where do you see the company going now over the near term?
Rebag will be expanding the team in order to grow our store footprint and technology efforts, particularly to improve customer experience and build upon our status as the ultimate handbag authority.
We plan to be in all the top luxury retail markets in the US, where we can reach our customer directly with an in-store presence. As we scale so will the tools available to better serve our customers, such as providing recommendations tailored to our buyers and sellers separately, which will improve the Rebag experience as they use our platform. Continuing to expand our data management and analytical tools will also lead us to share even more transparent pricing information with our customers.
What’s your favorite restaurant in the city?
I really enjoy Via Carota in the West Village. The wine selection and food are amazing. It has a rustic, neighborhood-y vibe in one of my favorite areas of New York.
