After a career in the world of gaming, Patrick Coughlan pivoted to the second-hand fashion market. With his Designer Exchange now specialising in high-end bags, he talks to Niamh Walsh about what his customers want and how AI is helping to weed out the fakes
Businessman Patrick Coughlan is perhaps one of Ireland’s unsung heroes for the female sartorial set.
He is the director and co-owner of Designer Exchange, a Dublin-based store which buys and sells pre-owned designer handbags.
Coughlan says that while he didn’t originally have an interest in handbags, he does have an uncanny ability for the buy and barter business mode.
“Don’t get me wrong, I’m massively interested in them now with the romanticism behind brands and the history of the brands,” he says.
“My passion is sniffing out a fake and finding someone their dream bag,” he adds.
Having worked in GameStop, the US videogame giant which left Irish market in 2023, he had seen how markets were changing.
“I’ve always been a champion of the trade-in model. We kind of pioneered it in GameStop. We were trading in consoles and games.
“So when I took redundancy when things changed with GameStop, I got together with my ex-managing director and we started thinking about what we could get involved in with regards to the trade-in model,” he says.
He carried out some consumer research in 2012 and discovered there was a gap in the designer market.
“I talked to my five sisters who said they wanted access to luxury brands without the price tag,” he says.
Coughlan’s departure from the gaming world and into the designer exchange field came at a most fortuitous time.
“The world was shifting at that time as well. It wasn’t shifting as rapidly as it is now, but it was shifting away from fast fashion and towards sustainable fashion,” he says.
Coughlan launched the Designer Exchange Boutique on Dublin’s Dawson Street in 2012.
It now operates from Exchequer Street and has six other outlets in Brown Thomas in Blanchardstown, Dundrum, Cork, Limerick and Galway, and in Arnotts on Henry Street in Dublin.
“We have been open for 12 years now. When we opened first we just sold clothing and stuff, but once we got into our stride with authentication, we moved predominantly into bags in 2015,” he says.
“For us, the market has shifted and we are selling ten times more bags than we were clothing.”
Coughlan had experience with all things tech, but handbags were new to him.
The quantity and quality of fake goods that were being shipped from China to Europe increased significantly during this time also.
To learn how to sniff out the fakes, Coughlan and his small team began buying the super-fakes and ripping them apart from zip to seam.
“Back when we were doing it, there were no real authentication courses. We had to figure it out, take each bag apart and see the subtle differences.
“So once we went through that process and we were confident we could put an authenticity guarantee on a brand, we signed off on one brand every three months. So it was a slow burn in the beginning,” he says.
The rapid advances in technology also proved to be a useful tool in Coughlan’s dupe-detecting mission.
“In 2017 there was a bit of a shift. AI started to become prevalent to indentations to things the eye can’t see,” he says.
“There’s a microscopic camera on a system called Entropy that we use. We still use our eyes on authentication, the measurements of monograms, testing of hardware, testing of holograms and many other facets.
“But with the AI technology, it gives us a financial guarantee. If the authenticity of the bag is questioned at any time in the future or there’s an anomaly, the customer gets their money back, so it kind of acts as an insurance underwriter.
“AI is by no means the only thing we rely on, but it is a really good underwriting that provides assurance for the customer.
“Now even the big brands would have problems with people returning a super fake to an actual store, after buying the real bag, to try passing it off as the real item. But you have to move with the times and with the technology to combat fraudsters.”
According to the company’s latest accounts, it had accumulated profits of €389,508 at the end of 2022. It reported a profit of €151,645 that year.
The number of people employed was 17, up from 15 in 2021. Salaries at the firm increased from €417,523 in 2021 to €508,495 in 2022.
The business is backed by businessman Kevin Neary, a cofounder and former director of GameStop Ireland.
He owns just under 60% of the company.
Coughlan says that any preconceived notions that second-hand items are less desirable are outdated. He says it is more affordable and better for the environment.
“People are making far more considered purchases. It’s no longer a taboo to buy pre-loved or visit charity stores. Charity stores are becoming a lot more fashionable,” he says.
“So it’s great to see people moving towards that way of shopping. There are no longer the musty-dusty vintage stores.
“They had their place and times, but charity shops and second-hand stores have moved away from that.
“When we kitted out our store, we wanted it bright, but we also wanted it luxury without the stiff upper lip.”
The shop also offers payment plans, an in-store deposit scheme where the balance can be paid within 12 weeks with no interest.
“But the most popular in our various consumer models is the trade-in. I guarantee people under certain terms that they get 70% back on when they buy from us and want to trade back in. So everyone can own luxury,” he says.
The company has also recently launched a rent-a-bag model.
“Our Gen Zs and our Millennials want instant gratification or that picture or Instagram at a special event with a really nice designer item.
“We’ve also seen people who maybe have three or more weddings to go to and they perhaps want a different bag for the various weddings. So, we’ve just launched our rent options.”
Photo: Patrick Coughlan at Designer Exchange on Exchequer Street. Photograph: Fran Veale
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