The market for handbags can only grow but it is unfortunate that the closets of owners cannot expand physically. Grace Chin looks at three enterprising businesses that are offering the cosmopolitan woman affordable style solutions.

Like cars, handbags are fashionable lifestyle accessories. For some, owning a beautifully crafted designer handbag (or an automobile) shows that you have arrived. But unlike cars, handbags move faster in fashion cycles and have no use for grease. They are versatile style statements, park easier on an elbow and are more affordable.

Depending on how you look at it, we are truly blessed and cursed that luxury fashion brands are paying attention to Malaysia as a potential market of growth. Brand awareness is at an all-time high, as the urban and suburban markets show. The rising popularity of online retail reflects this demand among the younger consumers, especially on blogs, some of which carry counterfeit or designer-inspired bags from high street and mid-range luxury labels.

While not exactly the real thing, the market is flooded with them, even though some of these handbags command a pretty penny — about three months’ supply of iced lattes. So, why not rent or buy a second-hand handbag instead? Enterprising businesses have emerged from the woodwork, offering variety and accessibility to luxury goods. The handbag is also considered — by some — as the season’s investment accessory of choice in these difficult economic times.
 
Excess baggage
Like many women, Wendy Chan loved bags but owned too many of them. Armed with an entrepreneurial spirit, a sociable personality and an expertise in handbags that can only be acquired by acquiring many handbags, Chan started an exclusive and personal service that dealt with excess baggage, some of which were her own.

Generous friends granted her the use of their business premises, such as fashion and jewellery boutiques, to organise tea parties. The cosy and private events were a hit with ladies who had a passion for fashion. Chan’s network of suppliers eventually became her customers and some became friends. Wendy Wang was one of the few who had a social and friendly relationship with her. They became close friends and eventually business partners.

They started Luxury Vintage, a business that purchases and sells second-hand designer handbags as well as a smaller collection of clothes, costume jewellery and shoes. Chan confesses that the business first started as a hobby but has since grown.

They began at a small space in Plaza Damas, Sri Hartamas, but moved to their current premises in Jalan Maarof, Bangsar, two years ago. The three-storey bungalow currently houses about 500 bags and also stocks vintage and second-hand apparel and shoes… a shopper’s haven.

Walking into the shop is a jaw-slackening experience. It is tastefully and simply decorated, with a classic chic vibe channelled through the frames of Audrey Hepburn pictures on the walls.

The fashionable bargain hunter, however, will pay scant attention to these details. Instead, the eye trails to the rows of handbags, wrapped in plastic — not very chic, but they preserve the bags from dust and grimy fingers. A closer inspection reveals that almost half of the items displayed are new and in excellent to near-mint condition.

Wang admits that some bags are consequences of hasty purchases, especially by holidaymakers in Europe — impulse purchases have supplied them with luxury brands that are not available in Malaysia, such as Narciso Rodriguez and Hussein Chalayan.

She offers a scenario possibly encountered by one of her suppliers. “Imagine you’re in Europe with the family and children. You’re trying to shop but you only have five minutes to make a decision. It could be a wrong colour or an impulsive purchase…” Wang’s voice trails off into laughter. That would not be far-fetched, we agree.

Depending on the brand, condition and exclusivity, the bags are priced at 30% to 50% of their original price. The gorgeous evening clutches are the ones that fly off the shelves. Their average use: once, probably from red carpet to dinner table to lap and chair and then home. Most of the evening gowns offered at Luxury Vintage have also been worn once and are especially in high demand for the year-end deluge of social events and celebrations.

The classic luxury handbag brands are Bottega Veneta and Chanel, favoured for their mature appeal and designs while certain designs of Louis Vuitton, Gucci and Prada do better with the trendier and younger shoppers, Chan says. As the business offers a variety of brands, designs and prices, the clientele ranges from 20 to 60 years of age, including men looking for gifts for their stylish partners.

Chan and Wang emphasise that they have no direct competitor in this business. Having a second-hand market for designer items means that brand-new products move off the shelves faster in the stores of mother companies and brand franchisees. Without the marketing budgets of the European fashion labels, the duo depend on building personal relationships with their customers.

Their business started off as a personal service and it still is a personal service today, Wang stresses. She explains that her clientele value depth of experience and the personal relationships built over the years. Their service represents confidentiality and trust, two very important values in dealing with second-hand luxury goods.

Customers are more likely to feel confident about issues of authenticity when being presented with the highly exclusive (Hermès) Birkin, for example, when either one of the owners is around instead of the shop assistant.

That Luxury Vintage has a ready stock of eight Birkin bags, some of them by commission, proves the duo’s credibility. Hermès’ Birkin is rare, exclusive, expensive and elusive. The official waiting list for the highly elusive handbag at Hermès stores worldwide is two to three years.

Like Chanel’s exclusive 2.55 handbags, the resale value of the Birkin is quite lucrative. A brand-new Birkin, bought from an Hermès boutique five years ago at RM30,000 will have a resale value of at least RM45,000, says Wang, depending on the bag’s design and condition. Needless to say, handbags with such price tags are kept at a good distance from burping babies and errant cigarette butts.

Typically, the discreet and discerning Wang and Chan rely on their experience and instinct when dealing with suppliers and commissioned bags. Receipts may be good but the duo would prefer to inspect the bags.

“Frankly speaking, if we are not comfortable with the bag, we ask them to take it back. [If it is not authentic], it is not our duty to tell them that their bags are not the real deal,” Wang explains.

Their clientèle has been growing steadily in spite of the perception that second-hand goods are of inferior quality and status. “The perception has definitely changed over the last five years as long as the products offered are authentic and in good condition,” says Chan.

It’s a serious business but one that they find joy in. “We are happy that we can help our friends recycle,” says Wang.

As we leave, she imparts advice to husbands and boyfriends who have been unpleasantly surprised by their partners’ luxury purchases. “They should bring their wives and girlfriends here… and thank us,” she laughs.

Style on loan
In Malaysia, the main problem with online shopping is trust, more so when it comes to luxury goods. Furrowed eyebrows may deepen more at the suggestion of an online rental service.

But everyone loves a bargain in Malaysia. If the price is right, resourceful shoppers can own a look seen on an A-list celebrity, from head to toe. Fashion cycles move very quickly online, where style references are only a click away. Websites and blogs that sell new and second-hand luxury bags are a dime a dozen, especially with younger shoppers who have grown up on the online medium.

Designer handbag rental services in the US, Europe, Australia, Korea, Taiwan and Hong Kong are a godsend for affordable wardrobe updates. Typically, members and visitors browse a website for its products, select an item and input necessary payment details and schedules for postage.

The rental fee is determined by a nifty formula which takes into account the age and condition of the bag and any wear and tear during the loan duration. If you find it difficult to part with a bag you love, most sites also offer the bag for purchase at reduced prices, even for brand-new bags.

The selling point of subscribing to such a service is that it is like a shared closet, open to a sisterhood of bag lovers. Members also get to “test drive” the bags before actually purchasing one, often at an attractively reduced price.

While Malaysia might be a less mature market, there is definitely a demand for and growing acceptance of renting luxury goods such as handbags. Malaysian entrepreneurs Brian Shu, who co-runs www.i-luxury.com.my, and Tan Kheng Hua of www.bagsinthecity.com agree heartily.

Founded less than a year apart, both online rental services were inspired by www.bagborrroworsteal.com, which received international attention after an unsolicited mention in the highly anticipated movie, Sex In The City.

Shu and Tan are not in the business for frivolous reasons. In their interview with Options, both displayed confidence that the concept of luxury rental will definitely take off, especially as they reach out with innovative approaches in their businesses.

Thinking out of the handbag
Discerning shoppers are turning to alternative online shopping sites for luxury goods in the current economic downturn, says Tan Kheng Hua, the director and co-founder of Bags In The City, a designer handbag online rental service (www.bagsinthecity.com).

Her rental business is not unlike www.bagborroworsteal.com, operated by Seattle-based company Avelle. But to gain trust and to establish the credibility of her service, Tan believes she needs to tackle the issue of trust by making the first move. She boldly launched Bags In The City as a rental service that did not require an initial deposit or annual membership fee.

Having lived in Hong Kong, the biggest designer market in the region after Japan, Tan realised that purchasing a designer handbag was a serious style investment. Designer handbag rental services take the burden of investing in a handbag away from a consumer while still making it extremely affordable to update their stylish arm candy either by subscribing to the rental service or purchasing the bag directly.

But Tan is far from a benevolent fashionista — she is running Bags In The City as a serious business. Without a doubt, it is capital-intensive and risky; each bag can cost upwards of RM3,000. Bags In The City currently offers 25 bags in its collection, one that is steadily expanding. Despite being newly launched, Tan has received very encouraging response and feedback.

“I could ask for a deposit but it would be very steep,” she explains. “But my point is that I want to make this as accessible to as many people as possible.”

Tan’s service is well thought through and certainly confidence-inspiring. The website allows for easy navigation and has clear instructions and secure payment methods. She also provides personal pick-up and delivery options and stresses that thorough inspection is always conducted in person, both by herself and the customer by using an illustrated chart of the bag as reference.

Bags In The City also offers official receipts from Tan’s personal purchases should there be a dispute about a bag’s authenticity. She takes great care to store and send the bags from professional maintenance. The service also has an office in the heart of KL, which is open to shoppers by appointment, should they prefer to inspect and collect their bags personally.

When the bag is delivered, customers still have the option to decline should they find anything unsatisfactory with it. Tan provides for refunds if the customer is unhappy with the condition — within reason, of course. “It’s an open service. I try to make it as accessible as possible to everyone.”

Packaging bags at the right price
After almost a year, says Shu, the co-founder of I-luxury, his online rental service (www.i-luxury.com.my) has a membership of 150. Although the core of his business is loaning designer handbags, the online rental business is rather slow, he adds.

“Rentingis only 30% of our business; the rest is from the sales of our designer handbags, which are priced lower than at retail outlets,” says the entrepreneur. Issues such as online fraud and authenticity come with the territory and these are on top of other hurdles Shu has to overcome.

“Some people are embarrassed to reveal that they are renting a bag. That’s a social and status issue,” he says, adding that he also organises private parties as an alternative marketing strategy. “We try to share the concept through private and exclusive parties... just friends having some wine, chatting about trends and bags.”

As the guest list is exclusive, a very narrow audience is reached. However, response has been very encouraging thus far, especially as guests get to meet him and see his bags personally. Some people are more comfortable with this approach.

Shu stresses that the website is not the alternative — all actual transactions are conducted online. “We reach out to different markets differently,” he explains. However, he truly believes in the success of the online-only business model for renting handbags and that the Malaysian consumer market will eventually warm up to the idea of renting a handbag online.

After 10 months in operation, Shu has decided to revamp the service’s membership fee — the annual fee of RM129.99 is now waived for the first year. In the coming months, I-luxury will be launching a subscription-based package to promote its rental services. It has about 150 handbags on offer, all of which are kept in a storage room. Shu’s US-based partner is responsible for the procurement of the handbags and updates the stock with almost 40 bags each season.

Taking a leaf from the book of telecommunication service providers, I-luxury will introduce one-year subscription plans for about RM99 each month, where members have the option of renting a different bag each month. Essentially, the package offers 12 bags, rotated over a year, for about RM1,188. This concept is definitely attractive but Shu is still undecided whether to limit the package to specific high street brands and designs.

This article appeared in Options, the lifestyle pullout of The Edge Malaysia, Issue 767, Aug 10-16, 2009.