Top quality takes pre-owned luxury to new level
A student entrepreneur who began building his brand at university is now reaping the rewards
JOSEPH McKENZIE was not your average university student. While his classmates swapped notes to cover for skipped seminars, he was out trading second-hand luxury watches.
The entrepreneur’s eBay business showed such promise that on graduating in 2009, he teamed up with his father, an accountant and amateur art dealer, to turn the sideproject into a fully-fledged company called Xupes.
The retailer today sells oil paintings, timepieces, Hermès handbags and Cartier jewellery. “We pride ourselves on having some of the best pre-owned items in Europe,” says McKenzie, whose enterprise deals only in high-end brands such as Rolex, Breitling, Bulgari and Chanel.
The firm started out of the family garage before relocating to a local office. “We knew that it was time to move when people kept turning up at the house to collect their purchases,” explains the owner.
McKenzie merged Latin and Greek translations for words such as “luxury” and “discerning” to come up with Xupes. “We wanted something a bit ambiguous, but also quirky and memorable.”
He and his father initially funded the business through personal savings, which they used to buy stock and hire a team. “We kept things lean and gradually reinvested profits back into the operation,” says McKenzie.
The pair faced a particular challenge in the early years.
“The pre-owned industry wasn’t very professional when we started,” he recalls. “Clients want to feel confident that what they’re buying has a warranty, isn’t fake, is in good condition and so on, so we offer that.”
On the quality control front, Xupes has an expert servicing team to carry out repair and restoration work, and it combats stolen goods and forgeries by sharing information with the police and a handful of global databases.
“That’s the biggest issue that faces our sector,” says McKenzie. He claims that Xupes has never sold a counterfeit. “People will not buy from you if a customer has ended up with a fake.”
It’s the kind of thing that can easily harm a start-up in an industry that is built on positive Trustpilot and Google Review scores, he adds. “It’s so easy for a business to be damaged overnight by a negative review – even among a sea of good ones.”
A turning point for the enterprise was moving to its current home: a restored 17th-century tithe barn on the outskirts of Bishop’s Stortford, Herts.
“It directly shaped our brand,” admits the co-founder. The combination of a “quintessentially British” exterior and a modern interior gives visiting customers both familiarity and professionalism, which has helped Xupes to offer something away from the “pretence” and “pressured sales environments” of many high-street jewellers.
“Experience is so important in the luxury space,” says McKenzie. “Some clients will buy at a distance online, but many of them want to touch, feel and see the products – and the barn was a big step in giving them that.”
McKenzie wants online shoppers to feel as comfortable and reassured.
That starts with a clean and contemporary website, extensive product details, high-quality images and videos, and a web chat function.
But taking things a step further is the “Xupes Journal”, a blog designed like a glossy magazine. Each post is written by in-house experts and goes into more detail on individual items (design and brand history, and famous collectors, for example). Completing each article are shots of models sporting the bags and jewellery.
“It shows that we appreciate our products as much as our clients, so when they read an article on a Rolex Daytona, for example, they’re reassured that we’re as passionate about it as them,” says McKenzie.
“It gives credibility to what we do, helps clients to make more informed purchase decisions, and builds rapport.”
Today Xupes has 41 staff and annual turnover of £6.4m. Early last year, it secured £3m in venture capital funding from Downing to improve its IT systems, hire more staff and buy additional stock.
The business has it all to play for, with a report by classified ad site Gumtree claiming that Britons spend an average of £1,300 a year on second-hand items – £57.4bn in total.
McKenzie puts the growing interest in pre-owned goods down to a demographic shift.
Millennials who grew up with the internet and are used to doing lots of research before buying are working their way up the career ladder and have more money to spend.
They generally have a more progressive outlook than their parents, who would have viewed second-hand items with suspicion.
People also now see pre-owned goods as good investments. “There are lots of luxury items out there that you can buy and pretty much guarantee making money on, with the rest holding their value if you look after them sensibly,” says McKenzie.
But he offers a word of warning for those who see a quick buck: don’t expect overnight riches.
There are plenty of opportunities for a small handbag or watch dealer, he says, but it’s very difficult to build a luxury brand fast, because it’s all about prestige, which can’t be built in a day.
Joseph McKenzie has built a company with turnover of £6.4m