A lending company in Hong Kong is accepting luxury handbags as collateral from borrowers.
The Lady Finance Co. is allowing borrowers to use handbags by Hermes, Chanel, Louis Vuitton, Gucci, and others as collateral for loans. There are several lenders in Hong Kong that are following suit, lending up to 80% of a handbags appraised value.
The Wall Street Journal reports that the handbags retain value similarly to that of high-end jewelry, watches, and electronics items. The demand for ultra-luxury items, both vintage and new, is creating new competition for luxury brands and retailers. Pawnshops are selling many pre-owned handbags as well as other expensive products. Similar business opportunities are cropping up in the U.S.
Pawnshops have also led to profitable resale businesses of pre-owned designer goods, with entrepreneurs going to luxury pawnshops in places like Las Vegas to stock up on their merchandise for resale.