Bag Borrow or StealSarah Lacy
This time it's not my horrible pun in the headline-- that's the name of a Seattle startup wants to be the Netflix for ladies' luxury goods from Tiffany's jewelry to Chanel handbags. You pay a monthly fee, about $20, $50 or $100, and get to "rent" handbags or jewelry and keep them as long as you like. When you're sick of an item, you mail it back and get a new one. Investors aren't put off by the mouthful of a name: The company is announcing an $8.25 million round tomorrow. They’ve raised almost $12 million to date.
I think this is a very clever idea and ties into larger trends of sharing everything via the Web; not just amorphous things like digital music, but actual goods. What's more-- this is a new business idea that could only happen on any kind of large scale over the Web. It's not just an existing concept like content, classifieds or catalogs moving online. Every girlfriend I polled exclaimed things like, “I love this company!”
Then, thought about the economics and got less and less enthused.
How big can this market be? $100 every month is pretty steep for teens to rent handbags and more affluent ladies could easily afford their own Chanel number. (Or at least a NYC street corner knock off, shhhhh.) And keep in mind: Couture items carry a steeper add on price per month—$200 or more on the bags I liked. “Our customers don’t tend to be people who couldn’t afford the bag they’re carrying, they want selection,” countered Adam Dell, of Impact Venture Partners, one of the investors in the deal. “Imagine having a virtual closet with a wider selection than any one individual could ever buy.”
It’s a nice idea. I'm plenty clothes obsessed. And Lord knows my journalist salary doesn't allow for an endless supply of designer handbags. That’s to say nothing of getting it home: Before he would marry me my husband made me promise I’d never spend more than $400 on a pair of shoes. In his mind, I’m sure that extends to handbags. But even he’d probably opt for me to save up for one really nice bag I love and could pull out year-after-year over tossing away $100 per month on a rental. And with $1200 per year, you could buy a pretty nice one every year.
It’s the same thing with Netflix and its copycats. We’re paying the equivalent of $50 to rent a movie because we’re too busy to watch even one a month. That’s why we’re going to cancel our subscription…..eventually. Why eventually? Because we keep forgetting and at just $15 per month, that’s a little easier to stomach.
Dell guided me to the testimonials on the Web site and I have no doubt there are a subset of women who would use and love this service. A quick poll to my bag obsessed friends just couldn’t find any. And we all fit in the target demographic.
Bag Borrow or Steal says its service is like borrowing stuff from your girlfriends. One important distinction-- your friends don't charge you a $100 lending fee, plus shipping. This “borrow” means rent and “steal” means buy it if you decide not to send it back. Not quite the same…