Leftover Luxuries: The Growth of Pop-Up Consignment Shopping

15 Oct 2013
  •  e+i Fall 2013

    In October 2009, Wendi Smith held her first consignment sale. She asked 20 friends for their high-end, high-quality castoffs—home furnishings, clothing, and accessories—arranged them artfully in an 800-square-foot commercial space a friend had provided in downtown Charlottesville, and sent personal invitations to friends and acquaintances to come and shop. Just four months later, Smith filled a space more than ten times as large with luxury consignments and attracted hordes of shoppers for a four-day sale, without spending a dime on traditional advertising. “There were tears streaming down my face as people were coming through the door,” she recalls. Leftover Luxuries, as Smith called her new company, was clearly on to something.

    As the name suggests, Leftover Luxuries embodies some seeming contradictions that make the company difficult to categorize. The “pop-up consignment boutique,” as Smith calls it, uses brick-and-mortar space, but only temporarily. It offers high-end merchandise—Chanel, Hermes, Gucci, and the like—but appeals to a flea-market, bargain-hunting sensibility. And it attracts people who often end up playing the role of both supplier (consignor) and customer. The sale held in September 2013 in Charlottesville was the company’s twenty-second. Sales are also scheduled this fall for Atlanta, Westport, Connecticut, and Charlotte, North Carolina.

    Now Smith, who is part of the 2013–2014 class of companies in the University of Virginia’s i.Lab Incubator, is exploring how to scale a business whose success has relied on her personal touch. The answer may lie in what are perhaps Smith’s most valuable assets: her extensive network of friends, family members, and acquaintances, and her reputation for transparency and trustworthiness.

    Originally from Los Angeles, Smith spent much of her early professional life in New York City, where she worked for a firm that did interior design for commercial spaces. When she moved to Charlottesville, in 2001, Smith retained many of her commercial clients and added residential interior design to her repertoire. Leftover Luxuries was in part a solution to a business problem: During a redesign, she often found herself needing to help clients get rid of pieces of furniture they would no longer be using. But the business was also a response to changes in her clients’ purchasing behavior in the aftermath of the financial downturn. “People were spending money differently,” she says. They still wanted nice things, but they wanted good deals. And they appreciated the opportunity to fetch a little money for their own used items.

    Like eBay, Leftover Luxuries leverages people’s interest in recycling—giving old items a new life—and in bargain hunting. The fixed duration of the sales—they last ten days, spanning two weekends—creates a sense of urgency. “Shoppers have different strategies,” Smith observes. Some line up on the very first day, before the doors have opened, hoping to snag the best items. Others scope out the merchandise early on but then wait to buy until later in the week, when remaining items are marked down. Many people visit multiple times to check out new merchandise that comes in during the sale.

    Unlike eBay, Leftover Luxury sales are a special occasion. Sales are held twice a year, in the spring and in the fall, in each location where the company operates. Smith spends the weeks leading up to a sale soliciting consignments through social media, word of mouth, and e-mail, and vetting the merchandise. In the days before the doors open, she focuses on creating compelling arrangements in the space. “I don’t just line up all the sofas,” she explains. Instead, she assembles items into “vignettes” that help shoppers picture how they could place pieces in their own homes. Consignees price their own items and take home 55% of the sales price. They can also choose to donate their proceeds or their unsold items to local charities.

    Each sale helps the others, Smith notes, expanding the web of consignors and shoppers in the Leftover Luxuries community. In addition to consignments from individuals, who e-mail pictures of their items for Smith to consider, she receives merchandise from retailers, auction houses, interior designers, dealers, and other consignment stores. “To them, I’m not the competition,” she explains. “I’m only here for a few days.” In her role as partner, rather than competitor, Smith has developed a reputation as a trusted businessperson. People send her items, such as valuable artwork, to consign without having met her and without asking her to sign any paperwork. “I’m an open book,” she says. “I’m open about my costs and my profits.”

    During her time in the i.Lab Incubator, Smith has taken important steps to prepare her company for growth: She has redone her website, implemented a POS system, acquired permanent warehouse space in Charlottesville where she can store items that come to her outside the sales calendar, and begun planning an e-commerce site that will also take a “pop-up” approach, operating only to sell goods that remain after a physical sale or a special assortment of merchandise that comes along. She has also started building a team, including Charlottesville-based Vanessa Easter.

    But the larger challenge is how to replicate the pop-up boutique model in more communities nationwide. The company’s growth so far has been based on Smith’s relationships. Her first sale outside Charlottesville was in Westport, Connecticut, where a close friend lives. Leftover Luxuries has expanded to Richmond, Westchester County, New York City, Atlanta, and Charlotte also because of friends, family members, and acquaintances, and Smith is counting on her extensive social network to jumpstart future growth. Her goal in the next three years is to add 24 or 25 locations, for a total of 60 sales a year. To that end, she plans to assemble of corps of regional managers to oversee the sales and to help find local “hosts,” who will do the kind of work Smith herself has done for most of the events so far. The ideal hosts and regional managers, she says, will come from the world of interior design or event planning and, like Smith, will have a large social network. “They should be people with a creative sense, with tentacles out there in the community,” she says.

    Smith is currently working on a blueprint for hosts that includes how to find the right kind of space and negotiate favorable terms, attract consignors, spread the word about the event, and operate the sale.

    Her hope is to find the right balance between expanding the business and still playing a hands-on role in some of the sales, helping to choose items and stage them on the sales floor. “That’s why I don’t want to get into franchising Leftover Luxuries,” she explains. “I wouldn’t get to do all the things I like to do. I would lose touch with the parts of the business I love most.”

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