Dubai: The Luxury Closet, a Dubai-based online retailer selling pre-owned fashion, will use the $11 million raised to bolster its presence in southeast Asia.
The business has so far raised $21 million in funding from the likes of Wamda Capital and Middle East Venture Partners.
Kunal Kapoor, who started the business in 2012, said The Luxury Closet was closely eyeing a broader international expansion. “Resale marketplaces are growing around the world. We need to focus on being more global.”
40%Share of Luxury Closet’s sales from outside the Gulf
Currently, 40 per cent of The Luxury Closet’s sales come from outside the Gulf. Markets like the US, the UK, Australia, and Hong Kong are highly attractive, Kapoor added.
“In southeast Asia, there’s lots of growth, but not many players. In the US, there’s still a market but there’s lots of players there. We don’t dream of being in the Top 5 in the US, but we can be a top player in southeast Asia.”
Part of those expansion plans crystallised in the acquisition of Hong Kong-based e-commerce website Guiltless, strengthening The Luxury Closet’s foothold in that territory. With their sizeable markets, Kapoor said that southeast Asia’s luxury sector had a lot in common with the Gulf.
$10bEstimated annual value of the Gulf’s luxury market
“The next question is how fast we can expand in Hong Kong,” Kapoor said, adding that the company would not move its base from Dubai despite the intensity of its interest in Asia. “Our lion’s share of sales will still come from Middle East.”
Nevertheless, there needed to be a “bigger push to go international”. This push would require further capital injections, according to Kapoor.
The business would begin fundraising again by the end of the year, with Kapoor saying it was just “the nature of the game”. He declined to say what amount the company would be looking to raise next.
The Gulf’s market for luxury is valued at around $10 billion annually. The issue, according to Kapoor, is that pre-owned fashion hasn’t seen the same kind of adoption in the region as elsewhere. As little as one in 20 luxury purchases made in the region are pre-owned, Kapoor said, compared to close to 10 per cent in the US and Japan.