Rebag, a reseller of luxury handbags and accessories from brands such as Chanel and Hermes, raised a Series D round of $15 million, the company announced today.
The round brings Rebag’s total funding to $68 million, according to the company, and was led by private equity firm Novator and includes General Catalyst.
In the midst of raising the round two months ago, it could have gone in any direction, Rebag founder and CEO Charles Gorra admitted, as it is more difficult for investors to commit capital when there is so much uncertainty, in this case related to the ongoing pandemic.
While the company was deep in documentation when circumstances began to deteriorate economically and socially, investors still required updates on the state of the business, Gorra said in an interview with Adweek.
But Rebag benefits from having backers such as General Catalyst that have a lot of confidence in the business and its model, he said. Ultimately, the impact of Covid-19 proved to be a blip in terms of disrupting the company’s growth: “We’re still largely on the ascending trend.”
Rather, the pandemic is going to accelerate the shift toward resale, Gorra said, particularly as customers both seek to raise cash by selling their accessories and look for bargains by purchasing secondhand items.
Part of Rebag’s latest funding round will go toward further developing and launching technologies such as Clair, a pricing tool for the luxury accessory market. Clair, which was rolled out late last year, calculates the value for any designer bag within minutes. For the company, it’s a way to attract customers and give them more confidence in the price they are paying.
“It gives instant value crystallization to customers and makes secondhand [buying] more transparent than what it’s been,” Gorra said.
Regardless of whether someone is actively looking to buy or sell, Gorra noted that Clair gives them a way to check on what used items are valued at. Typically, to obtain a quote, customers needed to have a product in their possession, which they would submit for an appraisal. Clair eliminates that process.
In addition, Rebag continues to scale its Infinity Program, which is a rental and resale hybrid for customers, allowing them up to a year to trade in their initial Rebag purchase for a credit to apply toward a new purchase.
Rebag’s growth is a testament to the power of the secondhand market: Even during the pandemic, the company achieved a record week of sales during Easter, Gorra said. Tthough the company did increase its promotional activity during the spring holiday by offering customers 15% off rather than the more typical 10%, generating even stronger demand, he noted.)
Interestingly, while Rebag has historically focused on the resale market, the company is exploring selling unused items due to the excess inventory held by luxury brands.
One of the challenges of resale is that supply is constrained, according to Gorra. “We always sell every product we can get our hands on,” he said.
But because the pandemic has shuttered stores, luxury brands have built up inventory, which has led to conversations between the brands themselves and Rebag, Gorra said. Such talks could lead to partnerships with these brands, with their products appearing in Rebag’s marketplace, though no deal has been inked yet.
“The merging of first- and second-hand will be accelerated,” Gorra predicted.
Rebag began business in 2014 as a digitally native brand, and today operates a number of retail stores in cities such as New York, Los Angeles and Miami in addition to selling goods via its app.
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