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Preparing for her elegant 2017 wedding at New York’s Plaza Hotel, Blake Geffen had hoped to rent a few luxury accessories to complete her bridal look. Except, she couldn’t. While lower-end rental options were abundant online, she discovered a gap in a fragmented market for high-end luxury loaners.To get more news about custom jewelry websites, you can visit jewelryhunt.net official website.
Sensing a sparkling opportunity, Geffen, who had worked in fashion PR, and her husband Wayne, who had a background in finance, spent their honeymoon putting pen to paper on a business plan. From this, they founded Vivrelle, a luxury accessories service that rents out designer jewellery and handbags.
As shoppers shed their social distancing habits and get back into the swing of weddings, parties and other special events, demand for luxury jewellery is trending upward. Antoine Belge, analyst at investment company Exane, expects a growth rate for the fine jewellery market of 10-12 per cent per annum over the next five years. A new generation of younger customers expect to be able to rent as well as buy.
However, unlike other rental products, jewellery faces insurance challenges, higher logistics costs from repeat shipping and returns of expensive items, a purchase rate aligned to one-off events and high expectations for top customer service.
Margins are likely to be low too. It’s hard to generalise about rental prices, but Hurr, another rental company, based in London, states that its rental fees for jewellery average around 8-10 per cent of the recommended retail price – for example, a pair of Susan Caplan Chanel earrings can be rented for £83-£227, while the retail price is £1,075. Verstolo, a fine jeweller in New York that offers some pieces for rent, says its fees are between 2-5 per cent of the retail price: rentals tend to be $275-$625 per item, with brides typically spending around $1,000 in total on jewellery rental. Vivrelle uses a membership model with different tiers of access. It also spreads the risk by renting out handbags too.Major high-end jewellers are reluctant to offer rental, for fear of competing with their own full-priced sales. (In contrast, luxury watch brands are breaking that mould with top players such as Breitling taking baby steps into luxury loaner options.) The lack of competition from leading jewellers has encouraged a mix of jewellery-only rental start-ups to emerge over the past few years, including Flont, Switch, HauteVault and BeekmanNYC. Even Hancocks London, a long-established historic jewellers, has begun renting bejeweled tiaras to brides enamoured with period TV series such as Bridgerton and Downton Abbey.
Despite the enthusiasm of a younger generation, the potential of rental and subscription models for jewellery remains open to question. Bridal and gifting purchases, which are important in many countries, tend to be highly emotional – the piece holding long-term meaning and personal value.
“For self-purchase occasions, rental and subscription models can serve as a way to reach a customer that might be looking for the variety, but are not able or willing to absorb the cost,” says Naiara De Leon, a partner in Bain Company’s retail practice based in Dallas, who says that bridal and gifting represents more than 60 per cent of the US market alone. “In the fine jewellery space, these models are nascent so we see growth, but given the emotional nature of this category for a significant part of the market, it will be hard to see it become a big piece of the pie.”
The founders of Vivrelle beg to differ. Launched in September 2018, the company is emerging from the pandemic, and says it has seen triple-digit growth with an expanding waiting list of those eager to borrow bling for a monthly membership fee. The three tiers range from $99-$279, with products available including $4,000 Stephanie Gottlieb diamond earrings and a $1,790 Cartier bracelet. The company says it has been profitable since its sixth month of operation, and in April this year, Vivrelle raised $26 million in series A funding led by Origin Ventures, with participation from Chapford Capital Group.
Previously, there was a negative connotation around luxury rental, says Wayne Geffen. He describes Vivrelle’s membership offer as “Bergdorf meets Soho House” and points out that the company avoids the word “rent” in its marketing and social media. “We decided to create a real elevated opulence in a market that has already shifted towards younger consumers who want an on-demand experience, where they aren’t tied down,” he says.
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