‘Need a loan? Pawn a purse.’ It is fast becoming the most popular Chinese proverb! The 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 accepted 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.” To date, she has put up three purses, Gucci, and Louis Vuitton’s, 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 the 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]