Alternatives to Luxury Shopping
Rentals, Pawn Shops Offer Options
By Bae Keun-min
Staff Reporter
Kim Hyun-a, 28, was picking out a luxury dress from clothes racks in a shop in southern Seoul Tuesday afternoon for a special dinner she had planned for Wednesday.
Kim and her boyfriend were to dine out at an upscale restaurant to celebrate the second anniversary of their relationship. Kim wanted to dress up for the special day. But no clothes in her closet were to her satisfaction, which was why she went shopping that afternoon.
Kim finally selected the latest sleeveless minidress in light blue by a high-profile American designer. She paid only 35,000 won for it with her credit card as she was not buying it, but was in fact borrowing it from the shop, Ace Maker, for two nights and three days.
She would have paid some 2 million won for the same dress at a local department store.
``I cannot afford such an expensive item. It's better to lease it for my special day without spending a lot of money,'' Kim said.
Leasing a Luxury Look
Ace Maker, equipped with some 1,000 outfits and accessories, is one of the nation's first to rent out high-end fashion products, a service which it started some six years ago.
``Most customers are women in their 20s and 30s,'' Lee Myoung-jick, president of Ace Maker, told The Korea Times. ``We have some 30 customers per day.''
Lee said business is hot during graduation time, year-end parties and job-hunting seasons.
``When I first started the shop, my target customers were entertainers and those who had to wear party dresses as part of their occupation,'' Lee said. ``It has been some two years since general customers began showing up here to lease clothes.''
Lee said he came up with the idea after noticing that women would purchase a pricey outfit for special occasions at department stores but return it afterwards for economic reasons. Thus, he tried to find a niche in the market, providing alternative, economical ways to have a sophisticated look, Lee said.
Stylists for entertainers, including actresses Su Ae and Kang Sung-yeon, still remain major customers of Lee. Actress Kim A-jung wore a striped dress from the shop in the 2006 mega hit film ``200 Pounds Beauty.''
``I believe there is a huge potential for clothes rental, including luxury lines to grow,'' Lee said, adding he makes 30 million won of gross sales per month.
Lee said some 50 clothes rental shops are in business just in Banpo-dong, and fashion districts Apgujeong-dong and Cheongdam-dong, all in southern Seoul.
``Clothes rental is not big enough to be called an industry in Korea yet. Therefore, no specific data has been collected to evaluate the business,'' said an official at the Ministry of Commerce, Industry and Energy.
Reportedly, it is estimated that some 500 online and offline rental shops dealing mostly in female fashion items are engaged in the slowly growing market.
Fashion-conscious females, like Lee Jung-eun, 34, are attempting to find a new career in the niche market with a small-scale online shop. Lee opened the online rental shop, StyleCare, last November after having a hard time finding work after having two babies.
``I started this business to utilize my previous work experiences at a clothing company and an Internet shopping mall,'' Lee said. ``I needed a large amount of initial financial investment compared to other online shops. But sales are steadily rising and I started breaking even on a monthly basis.''
Such rental shops often sell goods previously rented out a few times at fairly low prices so that they can invest in the latest trendy merchandise.
Shopping at Pawn Shops
There are other options for shoppers looking for a chance to buy top-label items at cheaper prices. One such place is the pawn shop.
Traditionally, pawnbrokers lent money by taking valuable items as a security deposit. However, the agents have recently found a new way to make money _ selling secondhand luxury products such as bags, watches and jewelry; or playing as middlemen for sellers and buyers of secondhand goods.
In the famous fashion district of Apgujeong-dong and Cheongdam-dong, a number of pawn shops specialize in these business deals. There is even a small alley of pawn shops across from the Galleria Department Store in Apgujeong-dong.
Some pawn shops are even equipped with dressing rooms so that customers can try on before purchasing.
``As more people began to think of luxury brands as one of life's necessities, they tried to find practical ways to use and buy them,'' said a pawnbroker in Cheongdam-dong, who requested anonymity.
The majority of customers at pawn shops are women in their 20s and 30s, but teenagers also account for a significant portion, the broker said.
``A substantial number of almost brand new items come here around one or two months after being purchased at retail stores as original buyers found the products not suitable for themselves,'' he added. ``But sometimes it's a case where a woman wants to replace the item with the most recent `it' items here at low cost.''
Pawnbrokers make profits from either buying the secondhand products and reselling them or receiving a sales commission. Prices of luxury items are sold at some 30-70 percent of the original retail price of brand new products.
They still provide traditional services _ lending money at annual loan rates reaching 40-60 percent on condition that items are put up as security. The money equivalent of up to 30 percent of the original retail price can be loaned at the pawn shops.
``The concept of recycling luxury goods began taking root in people's minds much like used cars,'' the broker said.
Distribution powerhouses are also looking into the new recycle market. Hyundai Department Store in Apgujeong-dong, southern Seoul has hosted a monthly bazaar, ``Green Market'' for the past four years, at which secondhand products and organic food is sold, including luxury goods.
Among housewives in southern Seoul, the market has become famous, where quality secondhand top designers' clothes are offered at really low prices. At last month's bazaar, some 300 customers lined up in front of the department store even before it opened.
