Rebag is bringing tech to resale in a big way and new capital is set to help the company increase the category’s innovation.
The six-year-old luxury resale platform that just secured $33 million in its latest funding round is upscaling resale savvy in a way it hopes will make sellers flock, buyers more secure and big spenders see ROI — not just the latest Chanel, for example.
At some point, Rebag could be positioned as the “Kelly Blue Book” of luxury fashion resale.
Resale, as much news has noted, has been on a wild upward ride fueled in part by greater interests in sustainability, value for money and the rare. And Rebag, whose latest capital infusion brings its funding total to $101 million, is gradually getting more share of the pie.
“Our business is close to triple what it was before COVID-19, so it’s massive,” the company’s founder and chief executive officer Charles Gorra, told WWD. “It’s significant growth, including in 2020, 2021, despite the state of the world, so I think that says something about the way this industry evolved from a behavior that was already there but was somehow niche, to a behavior that is becoming and about to become ubiquitous.”
The new funding will largely go toward growth — both online and off. Rebag already has nine store locations where consumers can enter with an item to resell, have it appraised, priced and purchased from them within 60 minutes, and there are plans for more stores in untapped markets. What that 60-minute seller convenience has brought is supply, which the secondhand market could be short of if sourcing can’t keep up with demand.
Rebag’s competitive positioning is a “fully managed model” that helps sellers avoid the hassle of shipping items in to be considered, priced opaquely, consigned indefinitely and then marked down enough to make the small check that arrives weeks (or months) later sometimes not worth it. Sellers can skirt the long-lead, peer-to-peer set-up, too — the company handles everything between buyer and seller.
“Our whole model is scratch that,” Gorra said. “To us the philosophy has always been that if you want this behavior to become mainstream we need to develop something that is absolutely seamless from a customer experience.”
Part of Rebag’s growth plan will be to capitalize on mindshare, which the company has yet to claim enough of. That’s partly because at the premium level where it sits, with a roughly $2,000 average order value (compared to what Gorra claims is roughly $500 on TheRealReal, for example), some consumers are priced out. But it’s also because there’s just room to reach more people.
“We don’t have as [much] awareness as some other sites and that’s really where the deployment goes on what we focused on in the last two years: customer experience, technology and creating a value proposition in the technology that applies to luxury,” Gorra said. “Right now, our assessment is the awareness of Rebag is somewhere between 5 and 10 percent out of our customer pool, which is great for a five- or six-year journey, but also it tells us how much more there is out there for us.”
With the new capital, Rebag will be reaching for that untapped customer, while also advancing its value adding technology, including its Clair Technology Suite aimed at adding transparency to the luxury resale equation. The Clair (which stands for Comprehensive Luxury Appraisal Index for Resale) AI tool, for one, can instantly recognize and price roughly 30,000 handbags across the leading 50 luxury brands when a user scans the bag using Rebag’s app or uploads an image of it to the site. From there, they can get an on-the-spot offer of what the company will pay for it.
With Clair Trade, users can buy and sell items in the same transaction (maintaining a sort of ‘one thing in, one thing out’ ethos that will fuel circularity), and just pay for any difference.
Endeavoring to maintain what it sees as its “edge” when it comes to innovating the resale space, Rebag released its first Clair report in October, which tracks shifts in luxury resale and doles out info to those interested about pricing trends, brand rankings and what products are retaining their brand value. Hermès handbags, per the report, retain an average 90 percent of their retail value, followed by Louis Vuitton at 80 percent and Chanel at 75 percent.
Breaking things down even further, viewers can see a Bottega Jodie Hobo keeps much more of its value (85 percent) than its Convertible Satchel (31 percent).
The smart tools and data lend themselves to sidestepping what can sometimes be seen as the frivolity of fashion, making for a smarter shopper equipped to make investment plays out of their purchases. Rebag’s app, according to Gorra, is a shopping companion.
“Imagine now you go to a store…I download the app, I have the Clair scanner. Now let’s say I go to a store and they have two items that are both selling for $1,000 and I like them more or less equally. Now what can I do? I can scan each of them. One of them resells for $300, the other resells for $600. I’m smart, I want to make [the right decision, so I’d say], ‘oh you know what, I kind of like them the same, I’m going to go for the one that resells for $600,’” Gorra said.
“What you realize is, can you tell me any other four-digit purchase where you do not think about the salvage value or the investment value of how you deploy your capital? Because I can’t,” he added. “Ultimately, we think that the visibility and the knowledge about resale prices influences people to buy more of the products that have a higher resale value and that’s why we do all this.”
Ultimately, Rebag wants to share this data and technology with the rest of resale to provide transparency for consumers. Kind of like Kelly Blue Book did for car buyers. With its latest funding, Rebag will be scaling up how many products its Clair AI tool can recognize, as well as getting it to provide the same service it now provides for handbags for watches and jewelry, too.
“We’re in discussion with a few partners [as to] how do we take Clair and use it to power third-party activities. And what I mean by that is Clair is a software — it’s actually an API — so you can take that data and you can plug it into other systems that want to provide resale activities. That could mean other resale marketplaces, that could mean luxury brands, that could mean department stores, so to me that’s where the next frontier is,” Gorra said. “Information is power and so we think if we can be the source of the information, we’re the source of the power.”
With that power, Rebag will be part of the luxury resale growth Gorra believes will be outsize in coming years.
“If you fast-forward five or 10 years, you’re going to start talking about decacorn type of companies,” he said. “There’s a lot more to come despite all that you’re seeing currently.”