A woman models a luxury ring, earrings, and hand bag from ShopWorn’s Cresskill warehouse. – SHOPWORN
Textiles entrepreneur Larry Birnbaum was having dinner with a fellow industrialist in 2015 who presented him the following issue: He had a bunch of luxury “shop worn” items – pieces handled in-store and moved daily from the safe to the shelf but never sold – and he wanted a better solution than destroying the stuff.
Birnbaum realized that the concept of shop-worn items wasn’t widely known and therefore represented an untapped market, save in the car world. A shop-worn item is like a car that’s been test driven, but never purchased — not “new enough” to be considered new but not ready for the “pre-owned” category.
In 2015, Birnbaum launched a website focused solely on these items out of a warehouse in Cresskill. Last month, he created his first international outpost in Hong Kong.
Birnbaum’s been in the luxury watch and clothing business for nearly three decades. The bulk of his history is in production, as a manufacturer of cut and sewn knits and knitted clothing in Manhattan and Argentina; eventually, he sold Ralph Lauren and Tommy Hilfiger clothing on eBay.
“Any nice Jewish boy from Brooklyn would’ve been in the garment busines at one point,” he joked.
His eBay business got him a Fortune magazine feature titled “Going Pro on eBay.”
Birnbaum
“From that article, because you never know how things are going to happen in life, someone in the luxury watch business read the article and contacted us out of the blue and said ‘it’s a great concept you have, but you should be selling watches, not clothing.’ We gave it a shot, and here I am over 20 years later running a successful business,” Birnbaum said. From 2000 to 2015, Birnbaum sold over $100 million in Swiss watches.
At ShopWorn’s inception, Birnbaum was presented with challenges in the form of pushback by brands he sought to purchase from. “They were jaded by companies who made promises but then sold their products to unsavory places. When we began sourcing products in Italy, for instance, we had to start with a handful of brands and retailers willing to test our model, but only with a small batch,” Birnbaum explained.
“It did not take long for these brands and retailers to realize, however, they had found a much-needed solution to their inventory problem with us while also gaining a trusted partner who honors every detail of our agreement,” he said. “That was the biggest thing– to show our partners who trusted us with their past seasons’ merchandise that we would never violate their trust and our commitments.”
COVID-19 has been Miracle Gro for e-commerce businesses. According to Adobe Analytics, U.S. online sales for September increased 43% year over year, reaching $60.4 billion. And the jump in e-commerce sales was not exclusive to the U.S.; overseas growth helped create ShopWorn’s first international presence.
Foiling fakers
Because ShopWorn only buys its products directly from the brand or an authorized seller, it’s got a leg up on eBay and other platforms where authenticity is sometimes in question. Fakes are a prevalent issue in the world of online luxury sales, a fact Birnbaum was reminded of by a not-so-clever ShopWorn customer.
“We once sent a watch out to a customer, and he sent us back a fake. It was clearly something he bought on the street somewhere,” Birnbaum said. “We contacted the authorities, and we sent him an email saying ‘we know it’s a fake, you’re going to get a knock on your door within 48 hours from the authorities if you don’t send it back.’ He did, and the kicker is, he requested we send the fake back to him!”
ShopWorn Asia launched last month to Hong Kong and mainland China after being conceived in April. With a customer base excited about luxury items but not big on pre-owned pieces, China and Hong Kong made for the perfect market, Birnbaum said. He started working with a Chinese advertiser, and Chinese consumers were “flocking to the site.”
Products are sold on ShopWorn at discounts up to 80%. – SHOPWORN
But the site was in English, shipping was an expensive challenge and common methods of payment in China such as WePay and AliPay weren’t set up, making the process more challenging for shoppers who might spend hundreds if not thousands of dollars on luxury watches, accessories and jewelry. So he hired two people in China to build a website with the right mechanisms for the Chinese consumer, and struck a deal with a shipping service that brought his flat-rate shipping from $95 per order to $20 per order.
Now Birbaum has an advertising campaign planned for the site ahead of Singles Day. “It’s Alibaba’s version of Prime Day. It’s on one-one, one-one [Nov. 11], that’s why it’s called Singles Day. It’s the largest shopping day in the world. They do crazy numbers. In 2019 in 24 hours Alibaba sold more than $38 billion,” he said.
That’s more than 10 times Amazon’s $3.5 billion in announced sales from this year’s Prime Day, so it’s obvious why a retailer would want a piece of the pie. ShopWorn created a flagship store on Alibaba’s TMall platform and curated the products for local consumers. Brands sell better in different markers, Birnbaum explained. Jewelry by Italian designer Roberto Coin, for example, sells well in the U.S., but is not as popular in Asian and European markets.
All items on ShopWorn’s website are shipped directly from its Cresskill warehouse. – SHOPWORN
“It’s not so unusual. Everybody’s got a different culture and what they like,” he said.
Now, with the technological infrastructure set up for international operations, Birnbaum expects to expand into other markets. All products, owned by ShopWorn and photographed for the website by an in-house photographer, will continue to ship from the Cresskill warehouse. He expanded the facility from 5,000 square feet to 6,000 square feet earlier this year.
“We have spent the money over the past six months where we can now expand to every geographic area in the world, and all we need to do is do the translation. The backend is now set up where everything will talk to the home office mothership in New Jersey,” he said.
Growth is expected as well. Currently selling 75 luxury brands, Birnbaum expects to sell 150 by the end of 2021.
