Feb. 17--Chicago-based Luxury Garage Sale has landed $1.5 million in funding that will help the upscale consignment shop take its gently used Chanel to new markets.
The seed round was led by Chicago Ventures, an early-stage venture capital fund, and includes investments from Trunk Club CEO Brian Spaly, whose men's styling company was purchased by Nordstrom last year. Other angel investors include former Lightbank partner Paul Lee and Lon Chow of Apex Venture Partners.
Founded four years ago as a series of pop-up shopping events, Luxury Garage Sale opened a boutique at 1658 N. Wells St. in 2012, differentiating itself in the resale landscape by offering its consignors "white-glove service" and selling its on-trend, curated finds across multiple channels.
In addition to its Old Town boutique and pop-up events, which take place at least every two months, Luxury Garage Sale sells its pre-owned luxury clothes, shoes, bags and accessories on its website and eBay.
With the cash infusion, the company hopes to open more stores in "B fashion markets" similar to Chicago, with strong access to wealth, low barrier to entry and less competition than fashion capitals New York and Los Angeles, said co-founder Lindsay Segal.
The company is in lease negotiations for a Dallas storefront, which it plans to open in spring, she said.
The funding also will help Luxury Garage Sale enhance its e-commerce site and build its Chicago operations team, Segal said. The company employs 30 people, she said, including sales associates.
The investment in Luxury Garage Sale is a departure for Chicago Ventures, which typically funds newly launched technology companies, said Kevin Willer, a partner in the fund.
"We think that combination of online and offline is what's going to be disruptive in this space," Willer said.
Segal declined to disclose annual revenue of the privately held company, but said it was profitable for the first time last year. Fifty-five percent of the company's sales come from its Chicago store, she added.
Segal, 31, founded the company with her best friend since childhood, Brielle Buchberg, also 31, both of whom attended New Trier High School in Winnetka. Segal was working as a personal stylist and in visual merchandising at Bloomingdale's when they started the company. Buchberg was an events manager at UBS Global Asset Management.
Luxury Garage Sale caters to a broad range of shoppers, but its "sweet spot," Segal said, is the "sport shopper:" A fashion-conscious, deal-aware woman in her mid-30s to mid-40s who treats shopping as sport.
Most inventory is sold at 60 to 80 percent off of the suggested retail price, she said. Handbags are the best-sellers. Chanel, Hermes, Celine, Louis Vuitton and Yves Saint Laurent are the most coveted brands.
With more than 3,000 consignors, 80 percent of whom are in the Chicago area, Luxury Garage Sale touts the grand experience it offers buyers and consignors.
Its 3,600-square-foot Chicago store includes a VIP shopping area where regular clients can hang out. Its consignment service is personalized to the desires of the consignor, whether they want to clean out a closet or daily updates on the status of the items they are trying to sell.
Consignors receive up to 65 percent of the selling price. Seventy-five percent of consignors repeat consign, a high rate in the industry, Segal said.
Luxury Garage Sale also sells overstock from boutiques around the country, for shoppers who shy away from pre-owned merchandise.
aelejalderuiz@tribpub.com
