It is 2pm on a Thursday, and Lan Kwai Fong is rapidly emptying as the stragglers from lunch make their way back to work. At the corner of Wellington and D'Aguilar streets, however, things are just getting going. A crowd of women is determinedly trying to elbow its way into a tiny 300 square foot boutique. With a mosaic facade of red tiles, it resembles the interior of Central MTR station. And since Milan Station opened less than three years ago, it has grown to be one of Hong Kong's hottest retail destinations. But Milan Station - its shopfront logo oddly mimicking an MTR exit sign - is no designer boutique; it is a second-hand shop, or according to the boutique's lingo, 'fashion recycler'. And if its success is anything to go by, what was once felt by Hong Kong's ladies who shop to be the ultimate social stigma ('second-hand, my dear? Reeallly?') is now a pragmatic way to recycle last season's cast-offs. Outside the store, a handful of mainland tourists has gathered, greedily eyeing the lurid display of handbags. The goods are all big-label must-haves: Louis Vuitton, Gucci, Prada, Hermes. Keith, the shop manager, steps out and welcomes the women inside. It resembles a busy bar with its flurry of activity, counter staff jingling the tills and customers weaving through the throng, exchanging their bags for cash and diving back in to rummage through the racks for something else they fancy. The pounding beats of full-volume LMF and Eason Chan, coupled with the buzz from the crowd, make for a lively vibe on a mundane work day. The tourists immediately gravitate towards a shelf by the entrance with monogrammed bags, and swarming, each begins to fumble through the piles, swinging bags on to shoulders, laughing and chatting like teenagers dressing up. A restaurant hostess, still wearing her red uniform and nametag, walks in hurriedly for a quick dose of retail therapy, one eye on her watch while she flicks through price tags on the hunt for a bargain. The salesman, seeing his customer is in a rush, whips up a few canvassed messenger bags and beckons her to the counter, where he opens them and shows off the lining. 'They just came in a few days ago so snap them up before they disappear. Items like these go in no time, and you won't see them next week.' A teenage couple, waiting for receipts for the two wallets they have just bought join a group checking out the recommendations that have just arrived from European and local boutiques. 'It's actually one of our quieter days today, it's usually so packed people are standing outside,' says one of the sales staff at the door, keeping a vigilant eye on the crowd of tourists . 'Well, at least they know it's a shop,' he mumbles with a slight smirk. 'We've had people come in and ask us to top up their Octopus cards thinking it was a train station.' At the helm is owner Byron Yiu Hong-tat, who seems to have attracted some celebrity as a trend guru and business genius through his store's quirks - a cash-exchange offer, pick-up services, savvy company branding and aggressive ads featuring sibling spokesmodels Kathy and Niki Chow. To these attractions can be added a recently launched buy-back scheme that guarantees customers a 70 per cent cash rebate on goods returned within three months (with receipt) and a Milan Station credit card that lets people pay for their indulgence by instalments. And it is his formula that has changed the fashion climate of 'here today, gone by next season'. To put in context how Yiu's 'fashion recycling' works, imagine someone buys a designer bag for $4,000, which may have a life of one fashion season only before languishing in a closet. But if the buyer takes it to Milan Station, Yiu may offer to purchase the bag for 70 per cent of its value ($2,800). He then re-sells it to another customer at a mark up of 10 per cent ($3,080). The new owner then brings it back within three months and receives a 70 per cent rebate ($2156), and the bag is back on the shelf for another 10 per cent mark up. It may look like fuzzy maths to some, but start crunching the numbers seriously and one soon realises the business of fashion recycling is a profitable one. A microcosm of the city's ever-changing retail environment, fickle taste and shifting social taboos, the shop has unsurprisingly also spawned a host of imitators, perhaps the most obvious being competitor Paris Station. 'You have to realise that women love to shop, regardless of the economy,' says Yiu, as he leans on his counter, glancing over at the shop's TV monitor as it catches a woman walking in with a tote to sell. 'The economic downturn doesn't mean they don't shop any more, they just feel the need to conserve, and we provide a cheaper option for them. Second-hand shopping is no longer seen as cheap. It's about being realistic.' Wearing a waterproof blouson and new Louis Vuitton pendant, the 35-year-old Yiu greets customers like an enthusiastic pawn-shop owner. 'Oooh, that's a really nice Chanel watch,' he coos, peering through his Dior Homme mirror shades. 'What about the bag? Marc Jacobs, eh? Nice sunglasses too - Valentino?' he continues, in the way a buyer would eye potential merchandise. 'I learned about fashion on my own because I've always been interested in luxury fashion. I love designer labels, and my favourite ones are Louis Vuitton and Chanel. I'm addicted to it, and my workers are hooked too - they spend most of their pay cheques buying things from our store and things from luxury-label boutiques. I think Asians in general have a thing for designer-name brands whether they are brand new or second hand.' Yiu's obsession may sound superficial or even vulgar, but he is unapologetic. 'People respect you more when you wear designer outfits,' he states matter-of-factly, rolling up his sleeves to show me his super-sized Cartier watch. 'I remember walking into Cartier one time with a Swatch on and the sales girl refused to show me the Tank Francaise I wanted to try on. I went there a second time with my Rolex Daytona and she brought out everything I wanted to see. I'm a nobody, and I need to look good to get respect.' He is a high school drop out whose parents ran a cha chan teng. 'I am not a tycoon, I used to assemble exhibition booths,' he says. It was Yiu's logo infatuation that inspired his first foray into retail. In 1994, he opened Amazing Place, a second-hand designer-label shop in Tsim Sha Tsui, with a female business partner. Such an idea back in the mid-90s was relatively novel in Hong Kong and Yiu's boutique was one of the first of its kind. It was certainly different from what most people would envisage as a second-hand shop - he wasn't interested in hawking vintage clothing. 'The idea was born when my business partner, who worked at Joyce as a sales manager, met a bunch of tai tais who complained about how much they wanted to get rid of their old clothes and how their clothes were not suitable for donation to the Salvation Army,' Yiu explains. 'I thought it would be a great idea to utilise the contacts I made with the tai tais and open a shop that sells their used clothes.' But when asked to name drop a few of his A-list contacts, Yiu is reluctant. 'The reason why they come to us and supply us with their used labels is because we're discreet,' he says. 'None of the tai tais or celebrities want people to know they're selling their used clothes and bags because it would give people the impression they're desperate for money and give them a bad image.' Yiu's entrepreneurial debut operated on a consignment basis - customers left their old clothes at the shop, and received a percentage when they were sold - but he soon realised he would have to restructure to make money. 'Consignment shops stock pretty dated things from seasons past, because people are reluctant to drop their stuff off when it takes an indefinite period for them to get their money back,' Yiu explains. 'Most people hold on to their newer items and only hand over really old stuff, so that became a problem eventually.' Yiu believed second-hand would sell but that he would have to have a more fluid supply of covetable merchandise, so he went it alone with a new concept, opening his first Milan Station boutique in Tsim Sha Tsui's Chatham Road in 2000. His idea seems to have paid off: he has now expanded to six stores in Causeway Bay, Tsim Sha Tsui, Sha Tin and Central. Five sell leather goods and accessories, and the boutique in Percival Street in Causeway Bay sells used clothing and accessories for men and women. Yiu is ambitious and says he wants to open two new shops every year, focusing his business in Hong Kong before tackling other markets such as Singapore, China and Taiwan. 'I want to focus my attention on Hong Kong first,' says Yiu. 'Our shop is quite popular among tourists who constitute 20 per cent of our business. I plan to expand into other markets after 2005. 'I introduced the cash-exchange policy because it appeals to human nature. People want to get cash when they sell their goods,' Yiu explains. 'That way, people are more willing to hand us their goods.'' Ironically, Yiu had done so well in promoting himself and the shop that he became the victim of a high-profile burglary. On the evening of September 4, an unidentified vehicle backed into the shopfront of the Chatham Road store and thieves made off with what Yiu claims was more than $800,000 worth of bags. Yiu's insurance covered most of his losses but the story made front-page news in most local papers and, incidentally, raised the profile of Milan Station. 'I think the burglary had been planned and they were looking for the right opportunity,' he says with a sigh. 'I lost my most expensive bags. I couldn't believe they drove right into the shop.' For shopaholics such as 48-year-old Lilian Tang though, Milan Station is the answer to a perpetual problem - clearing out her closet. 'It's discreet and very convenient. I can empty my wardrobe and get paid for clothes I don't wear any more,' she says. 'It's much better than throwing things out or handing them over to your maids.' And for fashion-savvy shoppers who are on the lookout for affordable designer goods, Yiu's boutique offers an economical alternative. 'You can find a pretty diverse selection of bags in the shops,' says Marina Chan, 23. 'You can get 70 per cent of your money back and I can then use the money and get myself a newer bag, so it kind of works like renting a bag for the season.' Yiu estimates he buys more than $200,000 worth of designer goods a day from his list of confidential contacts, who range from 'anyone you see in Ming Pao magazine' to 'prostitutes and mistresses who want to get cash in exchange for the expensive gifts they receive from their clients and suitors'. There have been times when he has collected more than $200,000 worth of goods from a single supplier. 'There was one time a housewife from the New Territories asked me to pick up $230,000 worth of designer bags,' he says. 'I walked into her living room and it was a phenomenal sight. She had all the bags lined up, more bags than a designer boutique! She's crazy.' Once bought, items are scrutinised again by Yiu's team to verify their authenticity - on what Yiu claims is based on their retail experience and some handy designer goods reference books published in Japanese. Despite the glut of pirated handbags in circulation, Yiu claims that his shops have never bought fake goods. 'In fact, there was a time when Next magazine sent their undercover reporters to our shops with a pirated Vuitton wallet. We saw it wasn't authentic and refused to quote a price.' Yiu gets new stock daily and when items have stayed on shelves for more than a month, he reduces the prices until they get picked up. 'If an item is unsold, sometimes we lower the price to its original cost just to get rid of it. As long as it's cheap, people will buy it regardless of style and quality.' Luxury goods companies such as Chanel and Hermes have refused to comment about Milan Station, while Louis Vuitton has issued a statement stressing it has 'no connection with Milan Station and its employees' and that it 'cannot guarantee the quality and authenticity of products sold outside its shops.' The big brands' concern about Milan Station is understandable and loyal customers are quick to point out the differences in customer service and shopping experience. But customers like Tang, for instance, say they are now more inclined to buy seasonal pieces from the boutiques because they know they can sell them to second-hand boutiques later. 'I can invest in classic and timeless designs because I know I can sell my clothes to second-hand shops. I am considering buying one-hit pieces this season. I never considered buying such items but now I know there's a channel for selling them, I am considering changing the way I shop.' First-class customers have an outlet for unloading their items when they no longer want them, and aspiring consumers can have access to such status symbols for a little less until they can afford to buy new. It could be compared to owning a used luxury car during your college years and buying a new when you've hit the big time. In fact, Yiu tries to preach his own philosophy to his customers. 'Bags and clothes are not jewellery: they depreciate, so treat them like mobile phones. The longer you hold on to it, the more it depreciates, so get rid of it while it's still in vogue,' he says. But Milan Station doesn't accept just anything designer. General Manager Angie Fu says they do not recycle white clothing or subdued styles. 'We want things that are conspicuous. The more logos, the better,' she says. Milan Station has also given Yiu the opportunity to relish in conspicuous consumption. Although he is vague about how much money he makes from the six stores, an undercover reporter once stood inside his Causeway Bayshop and in 15 minutes the cash register clocked more than $10,000 in sales. The fact that Yiu, his wife and two daughters can afford to live in a luxurious detached house in Ho Man Tin is testament to the cash he has made in the past three years. Strictly out of curiosity, I handed my designer Hobo bag over the counter for a price estimate. 'It's worth $9,000 brand new so we'll take it for $4,000,' says Yiu. Cash? 'Why of course,' adds one of his staff, already looking at the insides of my carry-all. Heading towards the door, I couldn't help but smile. Not only does Yiu understand why women are vulnerable to the temptations of affordable high fashion, he also recognises we can not resist the thrill of a great offer.
