For our interview series in association with Investec, we bring you the stories of business leaders who are driving British brands built on purpose and passion. As a company founded by entrepreneurs, Investec is shining a light on luxury marques within the Walpole family who share a mission to disrupt the status quo of their sectors, and what makes the mindset of the entrepreneurs behind these values-driven companies unique.
Here, we speak to Sabrina Sadiq, Co-Founder and CEO Luxury Promise – a social, commerce-driven luxury resale platform for handbags and accessories specialising in daily live shopping experiences.
When Sabrina Sadiq’s phone dings, it’s not just a text from a friend. The notification the entrepreneur and founder of second-hand luxury goods platform Luxury Promise has made a sale.
“It’s great for the endorphins,” she says, having come straight from one of the daily live-streamed auctions and shows she hosts with her staff. Just today, Sadiq and her team have sold several thousand pounds worth of handbags, jewellery and scarves, all in just under an hour, via a live-streamed video hosted on a phone.
The secondary market for high-end luxury goods has boomed in the last decade, in line with the growth of the primary market. Demand for extremely rare and coveted handbags and accessories from the likes of Hermès, Chanel and Louis Vuitton has never been stronger, and that has created an opportunity for Sadiq and others.
Sabrina Sadiq (centre) with her team at the opening of the Luxury Promise department store in London
Along with Luxury Promise, digital platforms like The RealReal and Luxe du Jour, and more traditional auction houses like Christie’s, Sotheby’s and Heritage Auctions, have all taken advantage of this explosion in the popularity of used and pre-owned luxury goods.
Demand is so high for Hermès bags – one of the most coveted brands because of its levels of craftsmanship – and the supply is so limited, that if you’re able to get your hands on a new bag, you’re likely to be able to sell it for three times the retail price simply by walking out of the shop, says Sadiq. That has created a thriving used and pre-owned market, with millions of shoppers willing to pay the price to get their hands on the top brands.
Case in point, recently a fuchsia crocodile skin Hermès Birkin bag sold for $222,219 at a Christie’s auction in Hong Kong, setting a record for the most expensive second-hand handbag ever sold at auction. Sadiq’s record with Luxury Promise is not far off that high.
She says one of the business’s key milestones was her first live event in Singapore in August 2022, which was advertised with a cryptic campaign which didn’t even feature a handbag. “Within the hour we did £250,000 worth of sales,” she says. “We’re talking about £100,000 Birkins flying off the shelves.”
In the last 12 months, growth has been exponential. Her staff has tripled to over 50 to support growing operations and scale, and revenue has jumped from $15 million a year ago to $30 million today. In February this year, she opened the largest pre-owned department store in London with help from the Mayor of London, Sadiq Kahn.
Mayor of London, Sadiq Khan, at the opening of Luxury Promise's second-hand department store in London, UK
This all started because of a chance encounter when Sadiq was studying to be a lawyer. A friend walked into class carrying a Hermès Birkin, and she was enthralled. “It opened up a whole new world,” she says, and bought one up as soon as she could.
When she realised she could sell it for much more than she paid, that planted a seed in her mind for what would eventually become Luxury Promise. But as a lawyer, she worried about getting in trouble if she wasn’t completely sure that the bags she was buying and selling were real.
To allay her concern, she learned how to authenticate bags, and found she had a knack for it. She built a database that listed data about real bag designs, launch dates and colours, which allowed her to prove without doubt that a bag was real. She sold her services as an authenticator to second-hand luxury shops, and eventually started a UK-based school for authentication.
Today, she says all her liquid cash goes straight into bags. “My pay does not stay in my bank account. I’ll always put it in a product that I know will grow in value,” she says. Her business is the same. Unlike other platforms which merely link buyer and seller, and charge a fee, Luxury Promise takes full ownership of every bag it sells.
All of her staff who appear on camera are trained authenticators, and each bag goes through a rigorous three-stage authentication process. Combined, that amounts to the promise in Luxury Promise’s name – that customers won’t get ripped off.
Sadiq also considers her staff to be traders, not shop assistants or salespeople, because of the unique ownership position that the business takes with every item it sells. “Team members have a trading mentality. We're traders because we own the inventory,” she says. She even uses the language of the finance world, but instead of trading stocks, shares or commodities, her team is shifting Birkins, Chanel shoulder bags and Louis Vuitton totes.
“It’s basic economics. Where we see an oversupply, the price is going to be a bit lower than what you find in the market,” she says. “Having presence in the US, Europe and Asia means I can arbitrage,” she says, referring to the financial concept of making money on price differences. “If the US is going well, I can say let's put all our eggs into that basket. Or, during the pandemic, when London shut down, Dubai was still open – so we were able to push Dubai out and get them selling.”
Despite her success, some investors told her the idea wouldn’t work. “They said just stick to e-commerce, improve the photography, don’t do live shows,” she said. “Everyone was like, are you QVC?" speaking of her initial investor meetings. “I said you can call me whatever you want.”
She raised money from friends and family, and from a client who decided they liked the business as much as Birkins. In 2022, venture capital firm Beringea was the lead investor in a $11 million funding round alongside alongside the Co-Founder of Watchfinder, and De Beers and Jimmy Choo executives.
Sadiq aims to use that money to “5x” her revenue in the next five to ten years, and wants to be recognised as one of the global players in the resale market, but she says her business’s overarching goal is to “democratise luxury,” and provide access to luxury goods no matter the time, the place or the price.
“I want to have a business that never sleeps. I want to be up 24 hours,” says Sadiq, whose staff in some cases take that concept literally. The other week, a team member in Australia hosted a live show that lasted a colossal 12 hours and 30 minutes. Back in London, Sadiq was up late into the night watching along – most likely listening to the ding, ding, dings.
> To find out more about the Investec partnership with Walpole or to discover how the Investec team helps entrepreneurs achieve their own version of success, email Investec at [email protected]