How Luxclusif Achieves Growth and Reduces Labor Costs by 78%

Luxclusif, a luxury retail startup in the resale niche, was acquired by Farfetch, a major player in the luxury scene. This acquisition transformed the company’s business opportunities. They achieved this milestone through strategic decisions, one of which was hiring a reliable offshore team in the Philippines.

Know more about this startup’s growth and how it went through a massive business transformation while saving on labor costs through offshoring.

All About Luxclusif

Initially a luxury goods trader, Luxclusif is now a fashion-tech B2B service provider. Since the luxury fashion market has a positive annual growth rate, this industry continues to be a profitable segment for many businesses. 

To see how Luxclusif evolved, here’s a deep dive into what Luxclusif is, its history, and where they are now.

The History of Luxclusif

Back in 2012, before they were Luxclusif, they were a startup called UpTeam—a pre-owned luxury trader serving countries all over the world. After a year or two, they were able to expand their sales network to 10 countries, most notably reaching Tokyo, Japan.

By 2015, Luxclusif started to build its Philippine offshore staff to expand their business operations. Eventually, the brand achieved milestones such as:

• Developing their European and USA hubs
• Acquiring their 100th client in 2017
• Joining a tech accelerator program that led to their acquisition by Farfetch

Farfetch acquired Luxclusif to accelerate their own resale program called Farfetch Second Life. They also wanted to improve resale capabilities through tech like automated pricing. 

In 2020, UpTeam then rebranded to Luxclusif. In the same year, they were able to open a new office in Portugal and sealed their first partnership with one of the leading luxury houses. 

In  2021, they were able to grow their global team to more than a hundred. To this day, they continue to serve resale solutions to their partners with increasing efficiency, thanks to their dedicated teams in tech, data, and growth-focused offshore staff.

How Luxclusif Works

Now, Luxclusif continues to operate in the luxury fashion market, but the brand specifically works more as a B2B platform for other businesses that need a resale-as-a-service (RAAS) provider.

Luxury businesses want to maintain the exclusivity of their brand, which reselling might reduce. By working with Luxclusif, luxury brands can increase their sales through the reselling of their excess inventory while maintaining their brand’s prestige.

There’s an increasingly positive sentiment among millennials and Gen Zs to own luxury fashion items. However these customers might not have the budget to pay for the full experience, so they opt to get second-hand goods instead. 

However, Luxclusif provides luxury brands the opportunity to create a more curated resale experience for their customers that more accurately represents their brand, as it can be the first touchpoint their brand has with that customer.

Luxclusif does this through a fully formed process that assists luxury brands with developing the right business model for this segment of their audience. They guide their clients through the entire resale lifecycle through solutions such as:

• Establishment of a pre-owned catalog
• Creation of personalized buyback programs
• Liquidation of excess inventory

Customers can also request tailored resale solutions outside of their turnkey or ready-made offers.

Why Luxclusif’s Customers Choose Them

The main selling point of Luxclusif is its full-circle solution for creating a luxury resale experience for luxury brands. Not only does this brand provide bespoke end-to-end resale models white labeled to these brands, but they also make it easier to distribute and fulfill product orders.

Luxclusif’s Challenges and Opportunities

As Luxclusif continued to pursue its plans of growth, the team found that they were going beyond a customer base that wanted to trade luxury goods. They encountered other luxury goods businesses that also needed a better resale experience as part of their customers’ sales experience.

They needed a robust workforce to efficiently service both luxury businesses and shoppers. However, back in 2014 during their bootstrapping phase, it was challenging to hire skilled workers without taking a massive hit to their finances.

One of the main reasons 75% of startups fail has to do with poor financial management. Thus, during Luxclusif’s bootstrapping phase, smart spending on labor costs was a priority.  They had to address this before they could expand their services and transform their business model.

So, how did they power through this challenge?

What Luxclusif Did to Better Serve Their Customers

As a response to the growing needs of their business operations and customer demand, Luxclusif found offshoring to the Philippines as a solution to address their personnel needs. 

The team worked closely with a seasoned and ethical offshoring solutions provider in the Philippines. Luxclusif partnered with Penbrothers for talent acquisition and Human Resources (HR) tasks like taxation, legal compliance, payroll and benefits, employee engagement, and more.

Watch Luxclusif’s success story here:

The hiring process was a seamless collaboration, ensuring that quality control was anchored on Luxclusif’s standards. They outlined the job requirements and included managers and stakeholders in the candidate assessment process. With these two elements, Luxclusif streamlined hiring operations for their offshore staff in the Philippines.

This partnership started in 2014 and continues up to now. Luxclusif counts on the offshore staff to cater to the new customer segment that came after scaling its business model.

Luxclusif has a long-standing partnership with Penbrothers because of the brand’s commitment to top-notch service. According to Ashley Flores, Head of Strategy and Sales for Luxclusif, in an interview, “We stayed with Penbrothers because of the service. We feel incredibly taken care of as one of their clients and partners.”

See also: Offshoring to the Philippines: A Viable Solution to Global Talent Challenges

The Results of Luxclusif’s Hard Work

By building a remote team in the Philippines through a local offshore solutions provider, Luxclusif was able to initiate capital-intensive projects related to the growth of their business, such as the development of their first application programming interface (API) and a significant business model shift.

Luxclusif pursued projects such as a tech accelerator program back in 2019 by Farfetch, an e-commerce company dealing in the luxury clothing and beauty products industry. Eventually, with Luxclusif’s healthy assets, reduced labor costs, and stable cash flow, FARFETCH acquired Luxclusif by 2021.

Aside from scaling the business, working with skilled Filipino workers has led to a headcount growth from 16 to 79 people while still managing to save 78% on labor costs.

To top it all off, Luxclusif has built a highly skilled crew of Filipino employees who handle the work they assign in a quality that aligns with the vision.

“Filipinos are highly trainable, extremely hardworking, and, the best English speakers you can get in the world of cross-border outsourcing,” highlights Ashley. 

Final Thoughts

By partnering with an offshore service provider to hire offshore workers in the Philippines, Luxclusif has been able to focus on outgrowing their bootstrapping stage, scale their business operations globally, and create a strong balance sheet leading to a beneficial acquisition.

Now, they have skilled workers in their roster to continue to provide high-quality B2B luxury resale services to their customer base. Luxclusif takes pride in being a strong player in the B2B luxury resale niche, providing tailor-made resale solutions to luxury brands around the world.