With January sales around the corner, many people are setting their brains on overdrive to work out the best ways of raising some additional cash to cover the great buys available. For those who don’t particularly relish the thought of subjecting themselves to credit searches, borrowing options may be limited. UK peer-to-peer lender Unbolted has a unique solution: a secured asset loan that dispenses entirely with intrusive creditworthiness checks.
Many people in the midst of short-term liquidity problems are actually sitting on money that could help them through. The trouble is, it’s locked up in a valuable possession, such as a luxury brand item. Unbolted unlocks that money by collateralising the asset as security for the loan. The platform takes control of the asset for the duration of the loan, whereupon the borrower either settles or allows the item to be sold at auction.
Certain luxury brands have the kind of strong secondary value that opens the door to an Unbolted loan. These brands, of course, are continually updating their product ranges and styles, whether they’re creating fabulous handbags or jaw-dropping jewellery.
Timelessness has great appeal. Hermès' stylishly classic Birkin bags, for example, are desired season after season. However, what gives a collectable item such long-standing value?
Alexis Clarbour, director of Portero, the New York resale marketplace for pre-owned luxury and vintage watches, jewellery and accessories, believes that such appeal falls into two categories. She says of consumers, “They either want access to something they can’t easily find and are even willing to pay a premium to have that instant gratification such as an Hermès Birkin bag or a collectable watch or piece of jewellery or they are looking for value to what the retail price may be.”
“For some, every penny counts, so the secondary market is where they can find their favourite luxury brands for a discount to their retail price. Consumers also love the idea that they can find a bag or vintage jewellery piece that may not be available in stores any longer.”
As she puts it, it’s “become increasingly chic to wear vintage or pre-owned.”
Hermès, for example, maintains a vice-like grip on its supply chain, rendering its most prestigious creations – Kelly and Birkin bags – unavailable online. They remain in very limited distribution, which elevates the secondary marketplace. Pre-owned crocodile Birkin handbags regularly sell for $70,000 (£47,000) or more on Portero, while leather versions can fetch anything from $10,000 to $30,000 (£6,700 - £20,100).
Chanel’s ever-rising price tags have also made its bags appealing resale items, especially the stylishly sophisticated flap bags.
There are several keys to value longevity. Hermès guarantees it by strict control over supply; while Chanel and others have undergone a brand transition that has seen their prices rise dramatically over the past several years.
