Основатель Luxity объясняет, как круговая экономика сохраняет капитал и роскошь внутри Южной Африки

GET THE LATEST ISSUE OF GQ Luxity Co-Founder Michael Zahariev on reshaping South Africa's retail landscape. Image: Supplied Michael Zahariev is the co-founder of Luxity, South Africa's premier luxury reseller, which he launched with Luke Calitz in 2016. The company specializes in buying and selling authenticated pre-owned luxury goods, evolving from a garage-based startup into a thriving business with an annual turnover exceeding R100 million. Since 2020, it has experienced remarkable growth of 594% and has secured a place on the Financial Times' list of Fastest Growing Companies in Africa for four consecutive years. Luxity's stores, located in Sandton City, the V&A Waterfront, Gateway Theatre of Shopping, and Menlyn Park, provide South Africans access to prestigious brands such as Louis Vuitton, Rolex, Hermès, Chanel, and Gucci. Keeping capital and luxury within South Africa: How circular fashion drives both economic and environmental sustainability. Before establishing Luxity, Michael was involved in approximately eight ventures across digital services, technology, and retail. His entrepreneurial journey began when he and Calitz were students working as waiters, seeking a way to supplement their monthly income of R5,000 from long restaurant shifts. This led to the creation of B Online, which expanded to a team of 28, offering services in development, online marketing, and graphic design. Michael's experience in the service industry inspired him to pursue a scalable product, ultimately leading him to the founding of Luxity. GQ sits down with Michael Zahariev to discuss everything about the industry that he works in. Read the full interview below: GQ: Did you ever envision yourself entering this industry? What was the turning point? Michael Zahariev : Luke and I have always been entrepreneurs at heart, so for us it was less about entering a particular industry and more about solving worthwhile problems. When a friend first approached us with the idea for Luxity, what really interested us was the problem she had experienced herself: there was no simple, safe and trustworthy way to sell pre-owned luxury goods in South Africa. We saw an opportunity to solve that. The first real turning point came when we launched and saw the immediate uptake from customers wanting to submit their goods. The volume surprised us, and we discovered that some clients owned hundreds of luxury bags, something we had never imagined at the outset. That was when we realised this was not a small or isolated problem. There was a significant market waiting to be served. GQ: You and Luke began your journey by waiting tables, aiming to replace a monthly income of R5,000. Was there a pivotal moment when you realised that Luxity was evolving into something far greater than your previous endeavours? Michael Zahariev One of the biggest pivotal moments was when we opened our first store in a major shopping mall. At the time, we had to convince mainstream mall operators that pre-owned luxury was a credible industry with real long-term potential. There was still a perception that second-hand belonged outside traditional retail environments, so securing that first location felt like a critical step in legitimising the industry within the mainstream South African retail market. It also coincided with a major period of growth for Luxity. Suddenly we were making sales every day, growing at an exponential rate and encountering an entirely new set of challenges. We had to rapidly develop our technology and operational infrastructure while also finding the right people to help us build the brand. That was probably when it became clear that Luxity had the potential to become something far larger than anything we had built before. GQ: With no background in fashion or retail, how did you educate yourself in a sector that was virtually non-existent in South Africa back in 2016? Michael Zahariev In hindsight, our lack of experience in traditional fashion and retail probably contributed to our success. We were able to approach the industry with a fresh set of eyes rather than simply following the way things had always been done. We focused on what made sense from the client's perspective and then allowed the data to guide many of our decisions. That gave us the freedom to innovate and take risks in areas where more established retailers may have been reluctant to do so. Of course, our lack of industry knowledge did not always work in our favour. There were plenty of lessons we had to learn along the way. But we became good at identifying the gaps in our knowledge that mattered and filled them through research, experience and, where necessary, bringing in people with the right professional expertise. GQ: Growing a business to over R100 million in turnover with minimal outside funding is quite uncommon. What were the most challenging cash flow lessons you had to learn along the way? Michael Zahariev Managing cash flow has probably become one of our defining core competencies as a business. One of the most difficult periods was during the COVID lockdowns. Like many businesses, we suddenly faced enormous uncertainty. We had invested heavily in growth, while our obligations, including consignment payouts, were set to continue even as revenue appeared likely to come to an abrupt halt. We knew that could very quickly become a serious cash flow problem. There was really only one solution: we had to find a way to keep generating revenue. Fortunately, we had already invested heavily in our online infrastructure, and we were able to lean into e-commerce and promotions to keep sales moving even during the strictest lockdown periods. One of the biggest lessons from that experience was the value of having a strong underlying offering and a loyal customer base. During difficult periods, that gives you something you can work with, particularly when you are able to create value for those customers in return for their support during uncertain times. We have also been fortunate to build a strong relationship with our banking partner, FNB, over time, which has played an important role in supporting our growth. I think many entrepreneurs become frustrated with banks in the early stages of building a company because the products and funding available to young businesses can be limited. But once a business becomes established, develops a track record and continues to grow, having a strong banking relationship can become an incredibly valuable asset. Opening a physical store in a location like Sandton City as a “marketing asset” defies conventional retail practices. What motivated you to take this risk, and how did it ultimately pay off? At the time, we were already running a successful online business and scaling our marketing across a number of digital channels. What we increasingly realised, however, was that we needed to establish a deeper level of trust with customers, and one of the best ways to do that was to create something physical rather than remaining purely digital. We initially started looking at billboards, but the costs were astronomical. This was also during what was being described as the “retail apocalypse”, when there were a lot of vacant stores in shopping centres. Walking past one of those empty stores, we thought to ourselves that it might actually be more cost-effective to brand an entire store than to rent a billboard. That is really where the idea came from. We initially viewed the store as a physical billboard, but one that could offer an immersive brand experience. The primary objective was not necessarily to create another sales channel, but to give people somewhere they could experience Luxity in person and, most importantly, build trust in the brand. The concept ultimately worked far better than we anticipated. The stores became powerful trust building and marketing assets, while also evolving into meaningful sales channels in their own right. GQ: You needed to develop custom technology to manage unique consignment inventory. What limitations of off-the-shelf software led you to create your own solution? Michael Zahariev : One of the immediate limitations we encountered with traditional retail software was the lack of true real-time stock synchronisation. That presented a particular challenge for Luxity because every item we sell is unique. These are pre owned products, so each item is ‘one of a kind’. If that item is available both online and in one of our stores, the system needs to know immediately when it has been sold or reserved anywhere in the business. If someone purchases a bag online while that same bag is physically sitting in a store, for example, the store needs to know immediately that it is no longer available. Otherwise, you run the risk of selling the same item twice. That was one of the first limitations that pushed us towards developing our own technology, but it quickly became much broader than that. Building our own systems allowed us to develop functionality specifically around the way our business operates, including consignment management, reservations, holds and the movement of unique inventory between locations. Ultimately, having our own technology has allowed us to innovate around problems that conventional retailers generally do not have to solve. Luke Calitz and Michael Zahariev started as student waiters seeking to supplement a monthly income of R5,000. GQ: In the early days, South Africans were hesitant to purchase pre-owned luxury items. What was the most challenging aspect of gaining their trust in the platform? Michael Zahariev: One of the realities of operating in South Africa, and more broadly in Africa, is that consumers tend not to trust by default, particularly when they are dealing with high-value transactions. I think that was one of the main reasons the pre-owned luxury industry had not developed meaningfully in South Africa before Luxity. No brand had really managed to establish the level of trust required, not only for someone to spend a significant amount of money buying a pre-owned luxury item, but also for a seller to hand over a valuable item on consignment. When we were still a purely digital platform, we focused heavily on making sure our design, functionality, communication and responsiveness were of the highest possible standard. We wanted customers to immediately feel that they were dealing with a real, established company rather than an individual operating informally online, and that there would be accountability and recourse if anything went wrong. The biggest step in establishing that trust, however, was opening a physical location in a recognised premium shopping centre. By doing that, we were effectively able to borrow some of the credibility that those shopping centres had already established with their customers. If a major shopping centre was prepared to have Luxity operating alongside established international brands, it provided another layer of validation that we were legitimate, professional and here for the long term. GQ: The quality of counterfeits has significantly improved in recent years. How is your team addressing the rising trend of “superfakes” locally? Michael Zahariev: Authentication is something we constantly have to evolve because the counterfeit market is evolving at the same time. Our team continuously researches new developments in counterfeiting and tracks what is happening internationally so that our authentication processes remain ahead of the methods being used to produce increasingly sophisticated fakes. Every item that comes through Luxity is physically authenticated by our team using a combination of specialist expertise, detailed inspection methodologies and technology. Depending on the category, this can include high-magnification microscopy, gemstone and precious-metal testing equipment, and a range of other specialist tools. Where necessary, we also make use of independent third-party authentication or testing. The important part of our approach is that authentication does not depend on a single test or characteristic. We build multiple checkpoints into the process so that an item has to satisfy a combination of criteria before we are comfortable authenticating it. GQ: What factors contribute to a handbag or watch retaining its value over time, while other styles may lose their appeal after just one season? Michael Zahariev: The two biggest factors are generally scarcity and sustained demand. If an item is highly desirable but difficult to obtain, it has a much stronger foundation for retaining its value. It also helps enormously when the product is part of a brand's permanent or iconic range rather than something designed around a single season or trend. A Chanel Classic Flap or Hermès Birkin are good examples. These are products that have been produced for decades and remain central to their respective brands. As the brands continue to increase the retail prices of these iconic products over time, that can also support values in the secondary market. We therefore tend to look at the core lines and heritage of each brand when assessing which products are most likely to retain their value over the long term. Products outside a brand's core competency generally tend to be less resilient. A brand that is globally recognised for handbags, for example, may not see the same value retention in some of its seasonal apparel or footwear. Trend-driven products can also be much more volatile. Their values may fall quickly once a particular trend disappears, although interestingly they can also recover years later when that style comes back into fashion. Ultimately, it is about understanding the intersection between scarcity, demand, brand heritage and whether something represents an enduring part of the market or simply a moment in fashion. In 2016, they co-founded Luxity after identifying a gap in South Africa for a secure, trustworthy way to buy and sell pre-owned luxury goods. GQ: Are your buyers primarily viewing these items as financial investments, or is consumer behaviour still driven by passion and status? Michael Zahariev: The market is still primarily driven by passion, personal taste and status. Most people are ultimately buying luxury goods because they enjoy them. There is, however, a segment of buyers who specifically look for pieces with investment potential and understand that certain items behave very differently in the secondary market. Buying luxury goods as an investment is an art in itself. Like any investment, it requires a detailed understanding of the market, the brand, scarcity, historical pricing and future demand. Because of that level of complexity, pure investment-driven purchases still represent a smaller part of the market. What we are seeing grow significantly, however, is what we call the “savvy consumer”. This consumer is not necessarily buying an item because they expect it to increase in value. Instead, they understand which products are likely to retain a significant portion of their value. They may buy a handbag, use it for several years, and then, when their tastes change or they simply want something new, resell it through the secondary market. They can recover a meaningful portion of what they originally spent and reinvest that money into their next purchase. That creates a very different way of consuming luxury. Rather than thinking of a R100,000 handbag purely as a R100,000 expense, the consumer begins thinking about the cost of ownership after resale. It effectively creates a more affordable and much more circular luxury economy, and we believe this savvy consumer is becoming increasingly important to the market. GQ: You’ve mentioned leveraging Luxity’s infrastructure to support local South African designers in scaling their businesses. What does this process look like in practice? Michael Zahariev: We have realised that there is a genuine market for locally produced luxury goods. We have seen this firsthand with brands such as Browns, which has been able to hold its own on our platform alongside major international names such as Cartier. To us, that demonstrates that South African consumers are willing to recognise, support and pay for local luxury when the quality and brand proposition are strong enough. That creates an opportunity for us to use some of the infrastructure and capabilities we have built at Luxity to support South African designers and luxury brands. Luxity has spent years developing expertise in areas such as technology, retail, e-commerce, marketing, customer acquisition, logistics, data and scaling a luxury business. Many talented designers are exceptional at creating products and building a creative identity but may not necessarily have the same infrastructure or commercial capabilities available to them. We would like to work with the right brands to help bridge that gap, whether that means giving them access to our customer base, assisting with the commercial side of their businesses, helping them scale their infrastructure, bringing their products to market, or potentially entering into more formal partnerships. Ultimately, the key point is that we are very bullish on Africa. We believe there is an enormous amount of creative talent here, and there is no reason that the next generation of significant luxury brands cannot come from this continent. GQ: Why is it so vital for you to keep these luxury goods circulating within South Africa instead of allowing them to be sold abroad? Michael Zahariev: We genuinely believe in the circular economy, both from a financial and a sustainability perspective. Sustainability is core to our vision, and for us it needs to be more than something used in marketing. It has to be reflected in how the business operates. The vast majority of the goods stocked by Luxity are purchased from individuals within South Africa and then sold to other individuals within South Africa. That means an item can continue changing hands and being used for many years rather than being discarded or replaced unnecessarily. Keeping those goods circulating locally also has an economic benefit. The money generated from those transactions remains within the South African economy rather than continually flowing overseas to international retailers and markets. So, there are really two circular economies operating at the same time. There is the circularity of the physical product, which supports sustainability, and there is the circularity of capital, where value continues to move between South African buyers and sellers. We believe both are important if we want to contribute meaningfully to the long-term growth of South Africa. Related Topics: