Dubai, UAE, 21 June 2021: Leading GCC online luxury resale marketplace, The Luxury Closet, announced that it has secured a $14 million equity capital raise in a round led by GMP Investments, with participation from regional and international investors including HB Investments, Nazer Group, MEVP, and MLM Investment Company. According to a company statement, the capital raised will accelerate The Luxury Closet’s already robust global growth with the company set to magnify its presence in markets outside the UAE and execute on a clear strategy to be a leader within the international high-end luxury resale market.
The resale industry in the region has witnessed remarkable growth in the past few years with companies like The Real Real, Poshmark and Thredup debuting on the public stock markets. This has also marked the birth of several other unicorns, with participation from fashion houses like the Kering Group.
The rise of pre-owned luxury fashion marks a shift amid the sustainability movement. Consumer patterns are shifting towards a more conscious and sustainable approach to fashion. Pre-owned items drive the fashion movement while offering buyers access to real luxury, which has previously been unreachable for certain customers due to price or availability in their regions.
According to Kunal Kapoor. CEO and Founder of The Luxury Closet, “Re-sale is the future of shopping. We expect one in six transactions to be pre-owned by the end of the decade. This marks a paradigm shift in consumer choice and the value chain of the fashion and retail industry. What we are excited about most is leading the industry to a more sustainable and environmentally friendly future.”
Middle East Venture Partners (MEVP) one of the leading venture capital firms in the MENA region has seeded and backed The Luxury Closet in each successive funding round.
“MEVP is happy to report a partial exit for its first Fund and remains bullish on its ownership in MEVFII and MEVFIII,” said Walid Hanna, Founder and CEO at Middle East Venture Partners (MEVP).
“We are delighted to lead this investment at a time when consumers everywhere are increasingly focused on sustainability. We are fortunate to be partnering with a visionary management team and leading investors from the region to make The Luxury Closet a key actor of the global resale economy,” added Faisal Mikou, Chairman of GMP Investments.
Mona Kattan, President of HB Investments said “Being eco-friendly is so important to us as family and an organization, and The Luxury Closet advocates that by recycling Luxury Fashion. Having a platform that allows us to re-sell and buy luxurious items at an affordable cost is so meaningful to us because it opens up accessibility to more people and also reduces the incentive to buy counterfeits. We couldn’t be more excited to be partnered with The Luxury Closet and we can’t wait to help them become a global leader in the space.”
The global pandemic has also accelerated what was already predicted within the resale market, increasing the flow of clothing onto the secondary market with shoppers looking to buy pre-owned more than ever. As fast fashion falls, second hand soars.
In the process of securing the funds, Awad Capital Ltd. a DFSA regulated firm, acted as financial advisors to the company, in cooperation with Drake Star Partners, a global technology focused investment bank.