Joe Mimran, founder of Joe Fresh and Club Monaco, is getting entrepreneurial again — this time going headfirst into the vintage luxury market.
Gibraltar Growth Corporation, Mimran’s special-purpose acquisition company, or SPAC, has purchased LXRandCo, a Montreal-based retailer of branded vintage luxury handbags and accessories, for 82.5 million Canadian dollars, or $61.1 million at current exchange.
“LXRandCo represents a unique opportunity to build a significant international business anchored on the continued appetite for luxury brands combined with the powerful and growing trend of re-use and extending product lifecycle,” said Mimran.
“There is a real white space in the vintage market. I really love the idea of filling this niche.”
Through a reverse takeover, LXRandCo becomes publicly traded on the Toronto Stock Exchange on June 14 under the symbols LXR and LXR-WT for Class B shares and warrants, respectively.
LXRandCo’s product assortment includes Hermès, Louis Vuitton, Gucci and Chanel among other brands.
Fred Mannella, who founded LXRandCo in 2010 with his wife, Kei Izawa, will continue to lead the business.
“A lot of our supply comes from Japan. The Japanese market is very large and sophisticated,” Mannella said, noting that there are about 1,000 auctions in the country that sell the vintage luxury products. In addition to shopping the auctions, the LXRandCo team frequents stores and also buys direct from consumers. Mannella lived with his wife in Japan for awhile.
“This is a great opportunity in North America,” Mannella said. “It’s such a scattered, mom-and-pop business here. Nobody has targeted the omnichannel in-store experience. There is white space in vintage resale in stores and online.”
Mimran has become a director of LXRandCo, will be active in the company, and is formulating the international expansion plan. “My role will be to assist the company from a growth perspective and introduce the company to senior executives at retailers in different markets,” including those such as Mexico and Australia where the company doesn’t yet have a presence. “I will also help on the branding side.”
“You have to look at this like a cosmetics rollout,” Mimran added. “LXRandCo takes very little space and is capital-light.” It’s a leased shop, typically with three-year leases, rather than longer terms. “Each deal is negotiated differently,” Mimran said.
LXRandCo sources and authenticates vintage products and sells through leased shops-in-shop in midtier department stores including Hudson’s Bay in Canada; Lord & Taylor, Dillard’s and Century 21 in the U.S., and Kaufhof in Germany. Shops average 250 square feet in size. LXRandCo shops will be opening this fall in the U.K.’s House of Fraser and John Lewis department stores, bringing the total number of shops to 122. The Montreal-based company also has wholesale operations primarily in the U.S. and has an e-commerce website.
“The shops generate on average about 2,275 Canadian dollars a square foot,” or $1,690 U.S., said Mimran, who formed the SPAC in 2015 and appears on the “Dragon’s Den” television show, which is the Canadian version of “Shark Tank,” though Mimran said “Dragon’s Den” was the first to air. “It’s a fun gig,” said Mimran.
“We’re talking about over 100 percent growth this year and next year,” Mimran said. “For further growth, we will go into men’s vintage bags and accessories and we are looking at vintage watches as well.”
“For the moment we are only operating in-store shops, but we have the intention in the next two to three years to very specifically have our own standalone store, where there are clusters of in-store shops,” said Mannella.
The Moroccan-born Mimran, along with his brother Saul, launched the Alfred Sung collection in Canada in 1981. He followed that with the launch of Club Monaco in 1985, which the Ralph Lauren Corp. bought in 1999. In 2002, he launched Pink Tartan with his wife, Kimberley Newport-Mimran, Pink Tartan’s president and design director. In 2006, at the request of Loblaw, he launched Joe Fresh, which he exited in March 2015.