‘Need a loan? Pawn a purse.’ Is fast becoming the most popular Chinese proverb! Latest news reports reveal a fast growing trend in Hong Kong, of the handbag-backed loan. A four-year-old company called Yes Lady Finance Co. has been accepting purses from Gucci, Chanel, Hermès and Louis Vuitton to sanction speedy loans within 30 minutes. Pausing for just a moment so assessors at affiliate Milan Station Holdings Ltd., a chain for luxury secondhand purses, can check the condition and give an “authentic” stamp of approval. If you’re lucky (read: the purse is très chic), a pretty Prada could do the trick too, for the loan that allows an amount at 80 percent of the bag’s value. Secondhand classic purses and special-edition handbags tend to retain much of their retail prices.
Already a large market for luxury brand purchases, it comes as no surprise that Hong Kong values the luxury handbag as a commodity for collateral. Living up to its Cantonese translation, “Rich Woman”, Yes Lady finds its place in Hong Kong’s booming pawn industry albeit in a niche reserved for the rich. A Ms. Wong says she uses the service when her money is locked up in savings or the stock market to pay for, say, daily expenses or her 5-year-old son’s tuition. All with just a Hong Kong address and an id card and the haute handbag, of course, “I don’t want to go through all the complicated application procedures in the banks.” Till date, she has put up three purses, Guccis and Louis Vuittons, for a total of $1,290.
One Yes Lady customer brought in 40-50 Gucci purses at once exclaimed company Manager Irene Chu. The client received a $38,000 loan and later returned to reclaim the bags, which he sold in his own store. About one in five purse-loan customers are male at Yes Lady’s two offices in Hong Kong, reveals Chu. A customer gets his/her bag back by repaying the loan at 4% monthly interest within four months. Yes Lady says almost all its clients quickly pay off their loans and reclaim their bags. After all it’s spelled ‘Gucci’ and not ‘giveaway’.
[Via – Wsj]