Fashionphile: San Diego's $500M Luxury Giant
The Carlsbad-based firm buys and sells of iconic handbags & accessories. We explore Fashionphile’s 20-year history and promising future.
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Founders,
20-year-old consignment boutique, Fashionphile is quietly building a billion-dollar company with no signs of slowly down.
Founded in 1999 by an entrepreneur Sarah Davis, the company resells coveted handbags & accessories made by Chanel, Hermes, Louis Vuitton, and more.
Fashionphile’s slogan is simple, “Shop. Sell. Repeat.”
The most interesting part? Fashionphile didn’t raise any outside capital until 2021 — and has remained profitable since day one.
According to WSJ, the company earns between $400 and $500 million in annual revenues, and has opened four luxury showrooms in Beverly Hills, San Francisco, New York and Carlsbad, which also serves as its corporate headquarters.
Today’s breakdown explores Fashionphile's 20+ year history and future.
High-level Overview
Fashionphile designed, elegant appointment-only showrooms where customers can either buy or sell.
From designer handbags, high-end watches, and limited edition accessories — the company’s competitive advantage is that it sells “ulta-luxury” items that are no longer available in traditional retail stores.
Its selection ranges from Hermès Birkin bags, watches from Rolex and Patek Philippe, jewelry from Cartier and more.
They even sell one-of-a-kind Louis Vuitton surfboard, currently priced at $13,595.
Founder Story
Davis got the idea for Fashionphile after seeing success as an Ebay seller.
While a full-time law student at University of Maryland, she had a side-hustle selling hundreds of designer items on eBay she no longer wore or discovered at a discount.
In the early days, Davis recalled reselling “last call” designer pieces from major retailers and flipping them a profit.
According to Davis, every time she sold a product, she’d take the profit and buy more.
Doing things that didn’t scale early on, she took product pictures on 35mm film, received physical checks in the mail before shipping items out to buyers.
At this point she was ready to go all-in on the business.
“My whole life, I’d go to these establishments and I’d be like, Wow, that’s an awesome fill-in-the-blank, but I’m not a size zero, so I would just leave it there… Eventually, I began saying, wow, that’s a really cheap Prada dress that’s a size zero and I could buy it and sell it on eBay,” said Sarah Davis, founder of Fashionphile.
Davis began to build out her team. She hired Ben Hemminger, her brother-in-law, and others to help grow the business. Together they spent the next two decades establishing a reputation of authenticity.
Launching Fashionphile.com in 2006, they started in a market with few competitors.
“We both saw an opportunity there. There was no one doing it at the time, except for local consignment shops and eBay. There was no Poshmark or Mercari, no place to buy preowned, authentic luxury products. So, we knew we could be that,” said David.
Maintaining Value
San Diego represents a small share of the market, with most goods shipped to New York, San Francisco, Los Angeles and China.
Brands like Chanel, Hermes, and Louis Vuitton consistently rank as top sellers.
If the ticket price is too high, customers can put down a 25 percent deposit, then pay off the balance over time through its Reserve program.
For centuries, designer brands have proven themselves to be worthwhile investments for the long-term. The value is heavily primarily influenced by price increases, brand heritage, and exclusivity.
“Bags are amazing as an asset class because they last longer than other product categories and can hold their value. From a sustainability point of view, bags can be used for 20 years.” said Davis, founder and president of Fashionphile.
The Competition
The pre-owned, a market segment projected to grow to $51 billion this year.
Today Fashionphile competes with The RealReal and Vestiaire Collective to win over new customers. Unlike those players, Fashionphile only sells handbags and accessories, not clothing.
Other competitors in the resale market, include Rebag, and thredUp.
Ensuring Authenticity
Fashionphile utilizes a proprietary pricing tool that leverages 20-year historical data. This tool allows them to accurately track market pricing and volume of sales for a particular item.
The most interesting part? Fashionphile also has its own in-house university that serves as a training program on how to properly authenticate luxury pieces.
Training each authenticator on specific luxury brands.
Partnering with Retail
Fashionphile is betting its next stage of growth will come from its deal with Neiman Marcus. In particular, customers can now sell their pre-owned luxury goods in exchanged for Neiman Marcus gift card.
Neiman Marcus now offers provides access to Fashionphile’s inventory of 15,000 pre-owned luxury items at 10 different retail location from Florida to California.
In 2019, the major retailer acquired a minority stake and became Fashionphile’s first outside investor, the investment amount was not disclosed.
“With Fashionphile, we will engage with customers participating in the secondary market and introduce Neiman Marcus to younger and aspirational shoppers already devoted to luxury brands,” said Geoffroy van Raemdonck, CEO at Neiman Marcus.
Peeking into the Future
Fashionphile has the right ingredients to become a billion-dollar business within the next five years.
The company has becomes synonymous with three important traits:
Establishing unwavering trust with customers
Buying and selling products at competitive value
Providing unparalleled customer service
Committed to being an environment-friendly company, they’re also working through the steps to become a certified B-corporation. Its motto is “saving the earth one handbag at a time.”
For all the reason listed above, it is clear why Fashionphile remains the largest online platform for buying and selling luxury handbags and accessories.
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