What should I check before buying a luxury consignment store?

A luxury consignment store is a different business from a general thrift or consignment shop. The goods are costly, buyers expect certainty about what they are paying for, and the store’s reputation can rest on one person’s eye. A buyer should look at the risks that come with high-value resale, not only at the sales history.

How items are authenticated

Ask who decides whether a handbag, watch or piece of jewellery is genuine, and how. Is it the owner’s own knowledge, a staff member, or an outside service? Ask how the store has handled a doubtful item before, and what the consignment agreement says when something proves to be a counterfeit. Your lawyer can tell you who would carry the loss under the paperwork as written.

Insurance and security for valuable goods

Under most consignment agreements the items belong to the consignor, yet they sit in your care; the agreement and your lawyer settle this. Ask to see the insurance policy and what it covers: stock owned by the store, goods held for consignors, theft, damage and items out for display or repair. Look at how valuables are stored overnight, and how the store handles viewings and high-value sales. Your insurance broker can tell you whether the cover fits the stock.

How concentrated the consignors are

Some luxury stores depend on a handful of consignors who bring in the best pieces. Ask the seller how much of the sales comes from the top few, how long they have consigned, and whether they would stay under a new owner. A short conversation with those consignors, arranged with the seller’s agreement, can tell you more than a report.

The owner’s expertise as the draw

If customers and consignors come for the owner’s knowledge and taste, think about what happens when the owner leaves. Ask how long a transition would be, whether staff hold any of the expertise, and whether you or someone you hire could build the same trust. Consider how you would answer that before you decide.