Tucked away in a nondescript office park in Carlsbad, Calif., the luxury resale business Designer Vault recently opened a chic, chandeliered, appointment-only showroom to market what it claims to be the largest collection of vintage Chanel in the nation — more than 1,500 handbags and accessories worth an estimated $2 million.
Less than 3 miles away, the headquarters for Fashionphile, which has boutiques in Beverly Hills and San Francisco, has floor-to-ceiling shelves and walk-in safes brimming with high-end designer purses, wallets and jewelry by Louis Vuitton, Prada, Dior, Cartier and many others. The bustling operation and abundant inventory are prompting the company's move to a new 30,000-square-foot warehouse in Carlsbad in July.
Welcome to the booming business of selling swank.
While demand for lower-market, so-called "gateway" designer bags — Coach, Michael Kors, Kate Spade, Tory Burch et al. — is in decline, premium luxury resale is one of the fastest-growing segments of the retail industry, generating from $16 billion to $25 billion a year, according to several studies.
Sales are being fueled by a seemingly insatiable and recession-proof desire for exclusive leather goods, brands that retain much of their original value and the ease of online sales, consignment, authentication and global shipping.
"People buy and sell for all sorts of reasons. Sellers, of course, are looking for cash, which many turn around and use on another bag," said Christina Samoylov, 27, the owner and founder of Designer Vault.
San Diego represents only a small share of the market for these costly Chanel clutches or cult-favorite Hermes Birken bags. The owners of Designer Vault and Fashionphile estimated that as much as 95 percent of their sales are conducted online.
"We ship out at least 300 bags a day," said Sarah Davis, co-owner of Fashionphile.
