From Start-up Failures to Potential Unicorn: Meet the brains behind Luxity
During the 2021/22 financial year, Luxity, South Africa’s largest pre-owned and authenticated luxury reseller, experienced an 86% increase in growth and a 190% spike from the start of the pandemic. Prior to Luxity’s establishment in 2016, the market for pre-owned luxury was embryonic, but has since expanded exponentially.
Despite this success, the entrepreneurial journey of the company’s co-founders has not been a smooth one, with various hiccups (and lessons) along the way. Please find below the story of Luxity co-founders Michael Zahariev and Luke Calitz, who first met while waitering to earn an income while studying computer science and marketing respectively.
Working eight hours a day but still taking home a paltry salary (and studying full time too), the entrepreneurial duo decided that there must be a better way to make money and so they came up with the idea to develop a website for one of the restaurants they worked at.
After a successful start, they approached other restaurants with offers to provide social media and website development services. Soon, a handful of clients was amassed – more than they could cope with – which resulted in them hiring additional support and the formalisation of B Online, a full-spectrum digital agency.
In their spare time, Luke and Michael began creating apps, the first being ReMe, a universal loyalty app which would negate the need for multiple loyalty cards from different retailers and also earn users points. The business partners approached retailers with their idea but, due to these companies all having different point of sale systems, it wasn’t feasible.
Their next venture, HiCarByeCar, was a car sales platform which was designed to assist car sellers in securing the best price when selling to dealers. Despite initial success, a competitor with more funding proved more powerful.
They say that ‘third time’s the charm’ and it was for Michael and Luke with Luxity. Following a conversation with a wealthy friend who had been scammed trying to sell her pre-owned luxury handbags online, the concept for a safe, convenient site on which people could resell their luxury goods was born. As soon as products were listed, they sold and so the company grew to include three physical stores in Nelson Mandela Square, Cape Quarter and Menlyn Maine. Luxity also walked away with the grand prize in the 2020 Grindstone Accelerator programme and was named a potential unicorn to watch.
The company has also created 30 jobs and, thanks to its unique business model, is contributing to the circular economy, while also keeping luxury sales within the South African economy.
Looking to the future, the businessowners want to expand Luxity’s footprint nationally beyond Cape Town and Johannesburg. This will kick off in KwaZulu-Natal. Plans are also in place to ramp up the categories currently offered by the company.
The pair also want to enable the growth of other nascent markets by providing South Africans with even more safe, convenient, transparent and accessible places to trade. They say the lessons learnt both from Luxity and the businesses that failed have helped them develop the technological capabilities for this.
We would like to set up an interview to discuss various topics such as
- The South African opportunity;
- Entrepreneurial advice such as how to spot an opportunity in the market and the best way to fund your venture;
- The psychology behind luxury selling: How some of the world’s biggest brands are convincing consumers to buy; and
- The South African luxury resale market explosion, including local and international market trends