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12-04-20, 15:08
Me & My Money: Luxury retailer has almost 60 bags worth $1.9m and says they give healthy returns
https://www.straitstimes.com/sites/default/files/styles/article_pictrure_780x520_/public/articles/2020/04/12/ST_20200412_SAMONEY12_5588716.jpg
Mrs Florence Low (centre), with her daughter Sage, 12, and son Liam, 11. Mrs Low runs two luxury retail platforms that sell handbags - LuxLexicon and LuxCollate. Her family lives in a built-up, freehold bungalow in the Katong vicinity, which has five bedrooms and a swimming pool.ST PHOTO: TIMOTHY DAVID
Published 9 hours ago
Retailer with almost 60 bags worth about $1.9m says they give healthy returns
Sue-Ann Tan
Most people have stocks, exchange-traded funds and properties in their investment portfolio, but Mrs Florence Low also has luxury bags as a secure asset.
She now has almost 60 bags, worth about $1.9 million.
Mrs Low, 47, also runs two luxury retail platforms that sell such bags, helping people to upcycle their bags or add new ones to their collection.
The platforms were founded in 2016 and 2018. One of them, called LuxLexicon, is a Hermes consignment platform that focuses on selling through Instagram, reaching out to more than 55,000 followers. It also set up a physical store in Orchard Road in April 2018.
Last year, the business grew 46 per cent in gross sales turnover year on year to $49.7 million.
Her other platform, LuxCollate, sells other European luxury brands besides Hermes.
"The business was our attempt to solve our customers' pain points. Some needed to sell their non-Hermes designer bags in order to save up enough funds to buy a Hermes bag from LuxLexicon," she says.
"Also, in the closets of some avid Hermes collectors sit a plethora of other designer handbags that are just waiting to be turned into cash."
She adds that her businesses form an ecosystem where people can buy and sell luxury handbags.
She is also exploring new channels due to the social distancing restrictions brought about by the coronavirus crisis. "We have rolled out IGTV (on Instagram) and weekly Facebook Live bidding in our efforts to stay connected with our customers," she says.
This is on top of free consignment pick-ups and delivery services islandwide.
She is also working with Carousell to reach out to a wider, younger audience.
Mrs Low graduated with a bachelor's degree from National University of Singapore's arts and social sciences faculty, before receiving a Master of Business in strategic marketing from Curtin University.
She is married with two children aged 11 and 12. Her husband is 50 years old and retired.
Q What's in your portfolio?
A My husband and I jointly own three commercial properties, one retail property and two residential properties.
The properties are all fully paid and make up 60 per cent of my portfolio.
They include a 10,500 sq ft built-up Katong bungalow bought at $10.5 million where we live, together with a 2.5-bedder, 1,320 sq ft Orchard Boulevard property bought at $4.8 million.
Our family is also covered by life and medical insurance policies.
I also hold 14 bonds in familiar bank names such as Credit Suisse Bond, Julius Baer, UBS and UOB, which make up 15 per cent of the portfolio.
Cash deposits make up another 15 per cent.
My Central Provident Fund account and professionally managed funds such as the Wellington multi-sector credit fund and Pimco GIS Diversified Income Fund E Class SGD (Hedged) Income make up 5 per cent.
The last 5 per cent is given to luxury handbags.
Q How were the average annual returns of your portfolio as a whole, and that of the respective asset classes?
A The handbags average 30 per cent yield because we can flip the investment a few times in a year.
Our bonds, funds and savings now yield a regular positive cash flow of $18,000 a month through interests and dividends.
Q What are your immediate investment plans?
A I want to take a more aggressive position in our inventory of luxury handbags in this soft market where sellers are more open to price negotiations. I am looking to increase my investment in handbags to 10 per cent of my portfolio.
My Hermes handbag investment portfolio has consistently outperformed my other investment portfolios, and with very little downside risks. I plan to double my current portfolio to $4 million and accumulate more unique pieces like the Hermes Himalaya and the Ombre Lizard.
Clients who buy from secondary market traders like LuxLexicon can still make a decent profit on their handbags, if kept unused. The dozen of customers who bought a Himalaya Birkin or Kelly handbag from us at $118,000 apiece in 2017 are now sitting on a $100,000 profit each, based on the last transacted prices.
In this current soft retail market, the prices in the secondary market are fairly soft, and you will be able to find rare bags trading at prices well below hammer prices at auctions. So there are plenty of opportunities to snag a good buy now.
Rare luxury goods will almost certainly increase in value over time. There will always be a ready buyer. With the ever-increasing number of millionaires in Asia, many would like to get their hands on a couple of luxury items, handbags included, to announce their arrival.
Q How did you get interested in investing?
A The need to grow my nest egg got me into investment in order to accelerate the growth of my retirement fund.
Q Describe your investing strategy.
A I am super risk-averse. If you study my portfolio, I have no investment in equities, and our family's 60 per cent portfolio in properties are all fully paid up.
My husband and I don't believe in biting off more than we can chew. So for all our investments, if we can't afford to fully pay for something upfront, we will not consider buying it. Our $2 million investment in handbags may sound risky to most people, but I know from experience that they are as safe as our investment in bonds, but with much healthier returns.
Q What else is in your financial plan?
A We have purchased $250,000 worth of Income's VivoWealth Solitaire for small, regular future payouts and US$2 million (S$2.8 million) worth of universal life policies from Prudential for the children.
I also bought an apartment in Boulevard 88 last year, intended as a gift for my daughter when she turns 21.
We haven't had time to get around putting together a will but are definitely planning to do so soon.
Q How are you planning for retirement?
A We plan to increase returns to our portfolio by adding equities in small increments.
We are on track in achieving our retirement needs in about three years. We need about $50,000 a month for retirement to maintain our current lifestyle.
By the time I hit 50, I will be ready to retire. Succession planning is already in place for our businesses.
Q Moneywise, what were your growing-up years like?
A I grew up in a middle-income household of six. I am the youngest of four children. My parents worked hard and never once made us feel that our circumstances were inadequate. Looking back, I know it must have been hard on them to provide for the family.
Q What does money mean to you?
A Money offers us the freedom to live life on our terms. And the ability to do good. We have supported charities helping young artists, for instance.
Q Home is now...
A A built-up, freehold bungalow in the Katong vicinity, which has five bedrooms and a swimming pool.
Q I drive...
A My husband and I own a black Porsche Panamera and a yellow Lamborghini Huracan.
Worst and best bets
Q What has been your biggest investing mistake?
A The biggest investment mistake I made is the retail space that we currently own in Balestier. It was purchased for $1.2 million in 2013 but it has received no rental income for the past two years.
Thankfully it is a freehold property, so hopefully we will be able to sell it off at some point.
The lesson I learnt from it is to never buy a property when there is a queue at the showroom. When the showflat is empty, that is the time to enter the market.
My husband and I bought our home for $10.5 million in 2016 when the property market was in the doldrums. We are sitting on a $1.5 million paper gain now.
Q And your best investment?
A I co-founded a luxury flash sale e-commerce website with my husband in 2009, and we sold it the following year to a Malaysia-based, public-listed company, for a healthy return of 50 times of our six-digit start-up capital.
It was the second business we co-founded and sold.
The first one was a contract publishing business that we co-founded in 2002 and sold in 2010.
The business provided one-stop publishing solutions, from copywriting and creative design to printing and delivery fulfilment for print collaterals such as annual reports and magazines.
Clients included Borneo Motors, SingHealth, Raffles Marina and the Singapore Academy of Law.
Sue-Ann Tan
https://www.straitstimes.com/sites/default/files/styles/article_pictrure_780x520_/public/articles/2020/04/12/ST_20200412_SAMONEY12_5588716.jpg
Mrs Florence Low (centre), with her daughter Sage, 12, and son Liam, 11. Mrs Low runs two luxury retail platforms that sell handbags - LuxLexicon and LuxCollate. Her family lives in a built-up, freehold bungalow in the Katong vicinity, which has five bedrooms and a swimming pool.ST PHOTO: TIMOTHY DAVID
Published 9 hours ago
Retailer with almost 60 bags worth about $1.9m says they give healthy returns
Sue-Ann Tan
Most people have stocks, exchange-traded funds and properties in their investment portfolio, but Mrs Florence Low also has luxury bags as a secure asset.
She now has almost 60 bags, worth about $1.9 million.
Mrs Low, 47, also runs two luxury retail platforms that sell such bags, helping people to upcycle their bags or add new ones to their collection.
The platforms were founded in 2016 and 2018. One of them, called LuxLexicon, is a Hermes consignment platform that focuses on selling through Instagram, reaching out to more than 55,000 followers. It also set up a physical store in Orchard Road in April 2018.
Last year, the business grew 46 per cent in gross sales turnover year on year to $49.7 million.
Her other platform, LuxCollate, sells other European luxury brands besides Hermes.
"The business was our attempt to solve our customers' pain points. Some needed to sell their non-Hermes designer bags in order to save up enough funds to buy a Hermes bag from LuxLexicon," she says.
"Also, in the closets of some avid Hermes collectors sit a plethora of other designer handbags that are just waiting to be turned into cash."
She adds that her businesses form an ecosystem where people can buy and sell luxury handbags.
She is also exploring new channels due to the social distancing restrictions brought about by the coronavirus crisis. "We have rolled out IGTV (on Instagram) and weekly Facebook Live bidding in our efforts to stay connected with our customers," she says.
This is on top of free consignment pick-ups and delivery services islandwide.
She is also working with Carousell to reach out to a wider, younger audience.
Mrs Low graduated with a bachelor's degree from National University of Singapore's arts and social sciences faculty, before receiving a Master of Business in strategic marketing from Curtin University.
She is married with two children aged 11 and 12. Her husband is 50 years old and retired.
Q What's in your portfolio?
A My husband and I jointly own three commercial properties, one retail property and two residential properties.
The properties are all fully paid and make up 60 per cent of my portfolio.
They include a 10,500 sq ft built-up Katong bungalow bought at $10.5 million where we live, together with a 2.5-bedder, 1,320 sq ft Orchard Boulevard property bought at $4.8 million.
Our family is also covered by life and medical insurance policies.
I also hold 14 bonds in familiar bank names such as Credit Suisse Bond, Julius Baer, UBS and UOB, which make up 15 per cent of the portfolio.
Cash deposits make up another 15 per cent.
My Central Provident Fund account and professionally managed funds such as the Wellington multi-sector credit fund and Pimco GIS Diversified Income Fund E Class SGD (Hedged) Income make up 5 per cent.
The last 5 per cent is given to luxury handbags.
Q How were the average annual returns of your portfolio as a whole, and that of the respective asset classes?
A The handbags average 30 per cent yield because we can flip the investment a few times in a year.
Our bonds, funds and savings now yield a regular positive cash flow of $18,000 a month through interests and dividends.
Q What are your immediate investment plans?
A I want to take a more aggressive position in our inventory of luxury handbags in this soft market where sellers are more open to price negotiations. I am looking to increase my investment in handbags to 10 per cent of my portfolio.
My Hermes handbag investment portfolio has consistently outperformed my other investment portfolios, and with very little downside risks. I plan to double my current portfolio to $4 million and accumulate more unique pieces like the Hermes Himalaya and the Ombre Lizard.
Clients who buy from secondary market traders like LuxLexicon can still make a decent profit on their handbags, if kept unused. The dozen of customers who bought a Himalaya Birkin or Kelly handbag from us at $118,000 apiece in 2017 are now sitting on a $100,000 profit each, based on the last transacted prices.
In this current soft retail market, the prices in the secondary market are fairly soft, and you will be able to find rare bags trading at prices well below hammer prices at auctions. So there are plenty of opportunities to snag a good buy now.
Rare luxury goods will almost certainly increase in value over time. There will always be a ready buyer. With the ever-increasing number of millionaires in Asia, many would like to get their hands on a couple of luxury items, handbags included, to announce their arrival.
Q How did you get interested in investing?
A The need to grow my nest egg got me into investment in order to accelerate the growth of my retirement fund.
Q Describe your investing strategy.
A I am super risk-averse. If you study my portfolio, I have no investment in equities, and our family's 60 per cent portfolio in properties are all fully paid up.
My husband and I don't believe in biting off more than we can chew. So for all our investments, if we can't afford to fully pay for something upfront, we will not consider buying it. Our $2 million investment in handbags may sound risky to most people, but I know from experience that they are as safe as our investment in bonds, but with much healthier returns.
Q What else is in your financial plan?
A We have purchased $250,000 worth of Income's VivoWealth Solitaire for small, regular future payouts and US$2 million (S$2.8 million) worth of universal life policies from Prudential for the children.
I also bought an apartment in Boulevard 88 last year, intended as a gift for my daughter when she turns 21.
We haven't had time to get around putting together a will but are definitely planning to do so soon.
Q How are you planning for retirement?
A We plan to increase returns to our portfolio by adding equities in small increments.
We are on track in achieving our retirement needs in about three years. We need about $50,000 a month for retirement to maintain our current lifestyle.
By the time I hit 50, I will be ready to retire. Succession planning is already in place for our businesses.
Q Moneywise, what were your growing-up years like?
A I grew up in a middle-income household of six. I am the youngest of four children. My parents worked hard and never once made us feel that our circumstances were inadequate. Looking back, I know it must have been hard on them to provide for the family.
Q What does money mean to you?
A Money offers us the freedom to live life on our terms. And the ability to do good. We have supported charities helping young artists, for instance.
Q Home is now...
A A built-up, freehold bungalow in the Katong vicinity, which has five bedrooms and a swimming pool.
Q I drive...
A My husband and I own a black Porsche Panamera and a yellow Lamborghini Huracan.
Worst and best bets
Q What has been your biggest investing mistake?
A The biggest investment mistake I made is the retail space that we currently own in Balestier. It was purchased for $1.2 million in 2013 but it has received no rental income for the past two years.
Thankfully it is a freehold property, so hopefully we will be able to sell it off at some point.
The lesson I learnt from it is to never buy a property when there is a queue at the showroom. When the showflat is empty, that is the time to enter the market.
My husband and I bought our home for $10.5 million in 2016 when the property market was in the doldrums. We are sitting on a $1.5 million paper gain now.
Q And your best investment?
A I co-founded a luxury flash sale e-commerce website with my husband in 2009, and we sold it the following year to a Malaysia-based, public-listed company, for a healthy return of 50 times of our six-digit start-up capital.
It was the second business we co-founded and sold.
The first one was a contract publishing business that we co-founded in 2002 and sold in 2010.
The business provided one-stop publishing solutions, from copywriting and creative design to printing and delivery fulfilment for print collaterals such as annual reports and magazines.
Clients included Borneo Motors, SingHealth, Raffles Marina and the Singapore Academy of Law.
Sue-Ann Tan