When it comes to fashion quests, few would think to look among the beige windowless warehouses dotting the flat landscape along Interstate 55 outside of Chicago.
But inside one such building, alongside boxes of computer parts and business forms, resides a fashionista’s fantasy: more than 3,000 designer handbags stacked 16 shelves high–Gucci, Prada, Jimmy Choo, Lambertson Truex, Balenciaga, Furla, Fendi, Yves Saint Laurent, Chanel and Louis Vuitton, to name just a few.
The vast inventory of must-have bags reflects the latest trend in making luxury affordable for a throw-away society.
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Online start-up Bag Borrow or Steal is banking it can cash in on Americans’ seemingly endless desire for expensive wares by leasing them at a fraction of their cost. Shoppers borrow coveted high-priced “It” items until they tire of them. Then they return the once-prized possessions and move on to something new.
Why spend $2,300 for a Gucci Indy bag when you can rent it for $95 a week or $275 a month and, when you’re done, swap it for a similarly priced Fendi Selleria tote?
“Everybody’s rotating accessories so quickly, it’s a great thing for someone who never wants to be seen with the same handbag twice,” said Antonia Thompson, a New Yorker who works in the fashion industry and who has rented bags to attend fashion shows in New York and Paris.
“The new culture is one in which you buy things recognizing that one day you’re going to fall out of love with it, so you don’t have an emotional connection that lasts a lifetime,” said Daniel Nissanoff, an entrepreneur and author of “FutureShop: How to Trade Up to a Luxury Lifestyle Today.” “The need for us as consumers is to constantly replenish our personal assets to give us the fix we need to feel good about ourselves. This goes well beyond handbags.” Trendspotters have dubbed these new shoppers “transumers,” consumers who want the best and newest stuff but don’t want the expense or clutter that goes with it.
FlexPetz will let you rent a dog. BorrowedBling.com will lease you jewelry, sunglasses and even belts. An array of companies rent paintings and sculptures.
Bag Borrow got its start in 2004 renting designer handbags out of an apartment in Hollywood, Fla. Last year the Seattle-based company expanded into jewelry. And now it is considering adding one or two new categories a year, such as shoes, evening gowns, furs, sunglasses, bridal dresses, men’s watches and even golf clubs. (The company plans to pick a catchier name in the next several weeks that takes the focus off just handbags.)
“We view ourselves as the next generation to eBay,” said Chief Executive Michael J. Smith while in southwest suburban Bolingbrook touring the firm’s sole distribution center. “We feel this is going to be a whole new channel, a whole new shopping experience.”
Members pay a monthly fee of about $5 to $10, then pay by the week or month to rent a bag. The higher the fee, the more expensive the handbags. (Non-members can rent at higher rates.) The most popular bags–such as the $1,420 Louis Vuitton embroidered speedy satchel or the $1,895 Chanel rock-and-chain patent flap bag have waiting lists and limits to the amount of time they can be rented.
Truckloads of bags arrive and depart from the Bolingbrook warehouse five times a day. The likes of Coach red patent shoulder bags and Maxx New York chrome bowlers are wrapped in brown tissue, placed in brown boxes and sent to the giant UPS sorting center in Hodgkins, near I-55 and I-294, where the packages are dispersed to bagophiles around the country.
Knowing how passionate women can get over handbags, Bag Borrow or Steal set out to find “America’s Ultimate Bagaholic” to serve as its “chief bag officer” next year. Women submitted essays and videos (some can be found at YouTube) in a contest that gives the winner free handbags for a year and a blog to dish about the experience. Entries were submitted last month and a winner is to be chosen Sept. 18.
One Bostonian sent a video of her sitting on the floor of her living room surrounded by “100 bags I can’t live without,” holding up a Dooney & Bourke as her “happy purse” and describing how she has one for every mood.
Another put together a parody of an Alcoholics Anonymous meeting with bagaholics clutching purses to their chests and in another scene a faceless man hiding behind a garbage bag whispering “Hey, lady. You looking for a bag?” A woman from Mississippi took viewers on a tour of her closet, describing the pressure she faces each day to carry a fabulous bag to the office. “I could come in naked, and they wouldn’t care,” she said in the video. “They just want to see that purse.”
To be sure, luxury brands in general have been slow to embrace the Internet for fear that their exclusive image could get tarnished among the Web’s bargain shopping. And Bag Borrow or Steal hasn’t bagged all the big bags.
Smith is working on getting an Hermes Birkin bag for the site, the Holy Grail of designer handbags. The bags start at $7,000 and the wait list stretches out for years. Martha Stewart made headlines toting her Birkin to her trial and the TV show “Sex and the City” built an entire episode around the coveted bag.
“It is an intriguing business model,” said Robert Burke, a New York-based luxury consultant and former fashion executive at Bergdorf Goodman. “Consumers’ buying patterns and the way they experience luxury goods have changed greatly. Everyone wants the immediate gratification of these things. Whether it’s renting handbags or earrings, it’s about having it and experiencing the luxury item.”
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Bag Borrow or Steal got handle on collecting
Greg Pippo and Lloyd Lapidus founded the company three years ago, when handbag collecting suddenly gained a cult following and NPD Group, a market research firm, discovered that women were buying, on average, three bags a year, up from one every two years in 2000.
In 2005, it caught the eye of venture capitalist Adam Dell, brother of computer empire founder Michael Dell. Steelpoint Capital Partners, one of Adam Dell’s investment firms, led an initial $3 million round of funding.
As a board member, Dell recruited former Nordstrom.com and Lands’ End executive Michael J. Smith to run the company.
“The whole notion of fractional ownership is an idea whose time has come,” said Dell. “We believe that there is a profound desire by consumers to have access to a much broader array of items without the hassle of ownership or the associated expense.”
Bag Borrow or Steal has since raised another $23 million and counts among its investors Madrona Venture Group, Valence Capital Management, Kuwait Holding Co. and another Dell venture capital firm called Impact Venture Partners.
— Sandra M. Jones
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Bags to snag
Rental prices for some of the most popular bags offered by Bag Borrow or Steal:
GUCCI ‘INDY’ TOP HANDLE BAG
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Retail: $2,300
Weekly rental: $95-$120
Monthly rental: $275-$315
CHANEL ‘ROCK AND CHAIN’ PATENT FLAP BAG
Retail: $1,895
Weekly rental: $95-$120
Monthly rental: $275-$315
LOUIS VUITTON EMBROIDERED SPEEDY SATCHEL
Retail: $1,420
Weekly rental: $80-$100
Monthly rental: $235-$270
Source: Bag Borrow or Steal
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