Dubai, UAE: November 27, 2019: Theluxurycloset.com, was created in 2012 with the purpose of disrupting the way consumers interact with luxury by introducing the concept of resale in UAE. Today, now known as a front runner in its field, The Luxury Closet is now one of the world’s largest e-commerce platforms for pre-owned luxury goods and has proven itself to be one of the most successful initiatives and business models in the world. Not only can consumers purchase exclusive and hard-to-get-hold of premium items, but by re-homing unused luxury products, the company extends their lifecycle and reduces the impact on the environment too.
Consumers’ luxury-shopping habits are changing; taking into consideration what ownership really stands for and its definition, along with the impact this has on the environment too. This new mentality is led by millennials, who think differently, have a louder voice with all of the social platforms that are available to them now and who have the power to affect their family’s decisions too. Over 50% of millennials consider resale value of a luxury item and 64% are influenced by the sustainability movement and factors before purchasing a premium item. This coupled with the fact that pre-owned items are priced on average 30-90% less then retail prices, according to the BCG’s 2019 True Luxury Global Insight, creating a very attractive proposition for customers.
The Luxury Closet model is hugely disruptive as it has a very different value chain compared to traditional retail. These days, what is considered fashionable isn’t necessarily what is shown during each season’s Fashion Weeks’. Customers don’t have to always buy new items that factories produce each month, they can purchase beautiful premium items, that each have a wonderful story behind them, that are already produced and just need to be re-homed. Research from BGC’s 2019 True Luxury Global Consumer Insight; Bain and Company, shows that there’s around $500 billion of net asset value just sitting in closets around the world and 80% of pre-owned market participants use online channels to get their information and trade their items – showing there really is a change in how consumers shop.
Celebrities too are stepping into the world of resale, in a recent example, The Kardarshian’s launched their own pre-owned venture ‘Kardashian Kloset’, with 80% of uploaded inventory, worth USD $130k, they sold the entire inventory in 5 days. The luxury resale market currently stands at $6B net worth and is growing by over 20% per annum.
By 2025, online channels are expected to represent 25% of global luxury-goods sales, with 100% of luxury purchases digitally enabled. Burberry have announced a partnership with global leader The RealReal, the luxury secondhand website which is listed on NASDAQ at a $2B valuation (a perfect benchmark), Ralph Lauren have teamed up with DePop and Neiman Marcus acquired a minority stake in Fashionphile, a $200 million reseller of luxury handbags, proving that large retail corporations are also riding the wave which has led the pre-owned model to become the fastest growth sector in the industry.
“The Luxury Closet has built one of the best catalogues in the world and just this year alone we have achieved remarkable milestones, such as going global with our launch in Hong Kong and our expansion across MENA. We are delighted that that the market is moving towards the direction of re-homing luxury goods and supporting such an incredible business model that not only helps consumers financially but supports the sustainability movement and protecting our future,” comments CEO and Founder of The Luxury Closet Kunal Kapoor.
MENA closets hold the very best items in the world, after all it has the highest per capita spend in luxury across the world. The Luxury Closet are successfully building a supply chain from all of these incredible closets and allowing consumers across the world access to them. Continuing this mission into 2020, the company plans on further expansion and will be looking for investors who can add value in helping the business accelerate to a $100 million in net sales in the upcoming years.