Why Rentals are the Present & Future of Luxury Retail

While New York Fashion Week used to mean hopping around the tents, expensive cab rides, and parties every day and night of the week (hello, liver failure), these days it's pretty irrelevant to me. The first time I ever got to attend a fashion show was one of the best days of my life. And after covering some shows from the rows (and standing room only) I eventually ended up working as a publicist for Bobbi Brown, which granted me backstage access so I could watch the magic unfold before my eyes.

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How I got there and how it worked out is basically luck and being at the right place at the right time. I shared a bed with my first roommate (this girl I met at a bar in Hoboken) because I couldn't afford to buy a bed. It wasn't glamorous, and I never even unpacked my clothes from the trash bags because she came in drunk one night and threw up Indian food in them. We all moved out a few weeks later after 9/11.

Within the next five years, I lived my dreams, and it didn't require scamming anyone or claiming to be a Ukrainian heiress. I worked a weekend waitressing job for four years straight to be able to pay my rent and bills because dream jobs pay you in glamour.  You can't survive off glamour unless you hit up all the parties and events, stand in front of the kitchen, and eat all the hors d'oeuvres off the trays before they get to the crowd. Guilty!

Trolling Fashion Week parties for freebies

My Luxury Designer Obsessions

My very first designer handbag was Kate Spade's nylon tote, which I bought in 1998 using money I made waitressing at The Cheesecake Factory. It made me feel so cool and powerful, it kicked off my obsession with designer handbags. And while spending a couple hundred dollars for a bag back then was a lot of money, there's no way that could've prepared me for the current prices of luxury designer bags, shoes, clothing and accessories.

When the Great Recession of 2008 hit, I wasn't laid off from Macy's mainly because my salary was a joke, so it wouldn't have helped anyway. I lived down at the South Street Seaport in a building that was next to AIG, and every morning reporters were outside interviewing staff and financiers, trying to get to the bottom of what happened. I'd rush past them on my way to the subway, cursing the roaches that crawled out of the drain as I was showering that morning, and checking out the Wall Street suits heading to the office.

I couldn't handle the noise and the bugs, so a few months later I moved to 83rd Street and 3rd Avenue, and that's where I discovered A Second Chance.

Designer Resale Became the New Retail

I was suddenly so obsessed with designer handbags, that in 2006 I accidentally bought a fake Chloe Paddington Bag and a fake Gucci Bag off eBay — I was allowed to return the "Paddington," but the "Gucci" seller disappeared, so I was stuck with it.

My "Gucci" Bag

At that point, all the fancy Park Avenue ladies were dropping off their designer goods to make money because so many of their Wall Street husbands lost their jobs. So twice a week, I'd drop in on my way back from a run in Central Park to see what was new, and just so I could touch something by Chanel or Hermes. The owner of the boutique was probably thinking, "here comes Raggedy Anne, yet again!"

I started monitoring the prices, and as I got better at identifying designers and collections, I learned the value of everything. Eventually they'd drop the prices and I'd take note of the final sales, and even started tracking prices on eBay and other sites. Then I discovered a lot of the other vintage boutiques in the city, but none of them could top A Second Chance Resale.

Chanel's East West Flap Bag

My first vintage purchase was a Chanel East West Flap Bag, which was discontinued in 2010. I paid around $950 for it in 2009. Today, it's going for over $4,000 on the resale market.

What in the fashion world is going on?

5 Reasons Why (I Think) Rentals are the Present & Future of Luxury Retail

1. Luxury Goods Are Expensive

On February 15th, Louis Vuitton announced price increases that impacted stores and products worldwide, and included small leather goods, perfume, jewelry and more. Citing increases in the cost of production, transportation, and materials, LVMH decided to raise their prices again by as much as 37%. And this is after Chanel's January 15th price increase, which was their fifth raise since 2020.

Let's take a look at Louis Vuitton's most recent price hikes, and keep in mind that just 15 years ago, the majority of LV's generic monogrammed canvas totes retailed for under $800 a piece.

Meanwhile, brands like Gucci and Dior have also hopped on the price increase bandwagon, but not to the extreme levels of Chanel and LV. And well, we all know about inflation on our everyday necessities like coffee, chicken, eggs, and gas.

While these top luxury brands claim to be raising prices due to pandemic-related issues, we all know there are two major truths at work here: 1. they all want to be exclusive like Hermes, and 2. the resale market is crushing the exclusivity factor.

2. The Resale Market Is On Fire

Luxury brands have taken note of the supply and demand of their products on the resale market, and also noticed many of their pre-owned items are selling for as much as, if not more than, brand-new bags and accessories. They’re fighting back.

As the designer resale market continues to flourish, top luxury brands are working behind the scenes to take control of price fluctuations, the exclusivity factor, counterfeit items on the resale market, and to make their prized possessions more out of reach — and that includes constantly raising the retail prices, so resellers have to raise theirs too.

Well, now on the resale market, anyone can buy a Birkin or Chanel Classic Flap Bag without pulling any strings, begging boutique owners, or minimum spends. They can just go online or go into the shop, pay for the item, and it’s theirs. And while this is great news for all of us, it means these items are no longer exclusive, elusive, or a one-percenter’s ideal way of showing off their wealth and status.

Now, I might ruffle some feathers here, but I follow Hermes threads on various sites and people are picking up second jobs specifically to purchase a Birkin on the resale market and that’s why luxury brands are retaliating. They want to keep their very wealthy clients happy and ensure their products remain somewhat unattainable, yet aspirational, and they do not want average Joes carrying their bags. And they want to price you out!

In fact, top luxury brands, like Chanel, have also put purchase limitations in place to limit how many items a customer can buy from the store. Louis Vuitton has had this type of limitation in place for a few years. For online purchases, no more than three leather goods, or two identical items are allowed per transaction. And within a four-week timespan, one client cannot buy more than six leather goods, or buy in more than three different LV stores in the worldwide network, or complete more than eight transactions.

3.  The Fakes Are Really, Really Good

Even though resale companies have years of experience working with designer goods and can afford to hire the best authenticators in the world, the truth is sometimes the super fakes get past them too. Now, we're not talking about the Canal Street LV knockoffs from 15 years ago — today's fakes are so good, even the experts are getting fooled.

Which leads me to another point: why would you want to spend over $2,000 for something that's knocked off for $200? One of the reasons I couldn't stand LV back in the day was because of the fakes. They were EVERYWHERE in NYC. And once I finally bought a few LV bags, I made sure they weren't ones that were knocked off or super common. That's why I went for the Stephen Sprouse Graffiti and the Takashi Murakami limited edition collabs. Plus, the resale value on limited edition items is skyrocketing.

If something seems too good to be true, 9.5 times out of 10 it's because it's a fake. And we can apply this to so many aspects of our lives, but it's super relevant in the luxury world. NO ONE IS GIVING AWAY A REAL BIRKIN FOR $2,000.

4. Sometimes It's Cheaper To Buy Something Brand New

But I thought everything was cheaper on resale!  Pfft... those days are long gone. I shop A LOT and I like to track prices for certain items on designer resale sites, bidding sites, and in stores too, and I've begun to notice that sometimes it's cheaper to buy an item brand new than on the resale market.

Wait, what? For example, I was writing a blog about the Hermes Clic Clac Bracelet, and with a quick Google search I discovered it's actually cheaper to buy the bracelet off the Hermes site than a resale site. You're paying an extra $100 for a bracelet that's been worn, scratched, and beat up simply because you've been conditioned to believe these items are unattainable and unavailable, and that's simply not true.

I've also noticed the same thing with the Dior Saddle Bag and the Gucci Dionysus. If you're interested in purchasing one of these bags, your best bet is to either go to a store or order it online. In some instances, it's actually a few hundred dollars cheaper to buy it brand new than used.

Now, the only time this isn't relevant is if the item has been discontinued or it's sold out — or it's a Hermes bag because you need to be dating Jeff Bezos to score one of those. If you can snag a Birkin, Kelly, or Constance directly from the shop (if you're deemed worthy enough after being on a waitlist for almost 10 years) you actually get a discount! The markup on these bags on the resale market can be as high as 50% to 100% depending on the reseller. YIKES!

5. Designer Resale Wholesale Is Incredibly Expensive

Lastly, I have a secret for you. While you may think of wholesale as a cheaper way of getting your hands on lots of designer goods for less, the truth is wholesale is driving the prices up too. I've combed through wholesale sites and bidding sites and what I've discovered is that even the heavily damaged items are selling for a lot more than retail price. 

So, how do you feel about dropping $700 on a heavily damaged Louis Vuitton Speedy Bag that caught on fire? Yikes! Guess what happens next? Resellers have the bags repaired, then relist them for double the price.

Why Are Designer Rentals The Solution?

I've been working in the fashion industry for a long time. I've seen trends come and go and watched new businesses and business models launch and then crash a few years later. The pandemic changed the way we think, feel, and how we shop, and many of us will not go back to stocking up on the latest trends and fast fashion pieces. We've all been scared into minimalism in some ways, and rentals can help fill that void in our closet.

As someone who couldn't shop enough in the past, I have cut back drastically to the point where I can't justify making certain purchases anymore. Maybe it's my age, maybe it's because I no longer live in a big city setting, or maybe it's because I don't have many places to go anymore, but as I mentioned above, many of these items now seem so far out of touch with reality, that I'm just finished investing in them as a whole.

Birkins are no longer what they used to be due to the resale market. Chanel has become too common. Cartier has amazing fakes. And Louis Vuitton is just angering people with their absurd price hikes on generic items that everyone's grandmother now carries (I'm talking about the Neverfull bag). Everything is too mainstream, too common, and too expensive!

With rentals, you have the option to borrow for as long as you'd like and return it once you've had enough. You don't have to worry about cleaning, repairs, and investing in an item everyone else owns too. Plus, with awesome rental options like Rent the Runway for clothing, Rocksbox for contemporary jewelry, and Vivrelle for designer bags and luxury jewelry, you can rent a Peter Pilotto Dress, a Kendra Scott Necklace, a Chanel Classic Flap Bag, or a Cartier Love Bracelet without dropping thousands of dollars for it to sit in your closet until next time... and who knows when that'll be.

My Predictions For The Future Of Designer Luxury Brands

Limited edition bags like Prada's Bunny Bag (and a bunny)

By 2027, most items will be available for rent just like a car or an apartment. You will see rental shops pop up all over the place again, and you will be able to walk into a shop or a hotel lobby and rent an item for the day, weekend, or for a month with a large deposit and a working credit card that will be charged if the item disappears or gets damaged.

Top luxury brands like Chanel, Hermes and Louis Vuitton will start creating limited edition capsule collections that'll only be available for purchase by their top customers. Bags like the Birkin and Kelly will become mainstream and drop in price on the resale market. The one-percenters will be very happy with the newfound exclusivity factor, and the bags will be microchipped, tracked, and tagged so as to avoid hitting the resale market. If the bag does end up there, they will face a large penalty, and this is how these items will remain exclusive.

So basically, the high-end fashion world will be like a dude's trip to Miami or Vegas, and instead of going to an exotic car rental dealership to rent a $300,000 sports car for $300/hour, you'll pop into Vivrelle and rent your Birkin for the weekend for $2,000.

Stay tuned!