Second-hand bag trader Milan Station is finding it increasingly tough to find Hong Kong shoppers prepared to fork out HK$50,000 for a second-hand bag. But one Japanese retailer is betting increasingly budget-conscious locals will not turn up their noses at other types of used goods. Japanese second-hand goods seller Best Buy Tokyo opened its first shop in Taikoo Shing this month, selling everything from used electrical appliances to clothing, shoes and jewellery. Best Buy Tokyo plans to list in Hong Kong within four years but hopes it does not repeat the performance of Hong Kong's own homegrown used-goods seller Milan Station, which saw interim net profit plunge 99 per cent to just HK$386,000 a year after it went public in May last year. "While the profit margin for used luxury bags is between 7 and 10 per cent in Japan, the margin for used clothing and household goods can reach 60 to 70 per cent," company director Kagayaki Goda said. "In Japan, we even sell used handkerchiefs just to keep our clients happy." While such a sales model may not apply to Hong Kong, Best Buy's vast market in Japan - it has 108 outlets - will provide an excellent destination for unwanted goods in Hong Kong. The variety of its product mix also means their shops do not always have to be in the best locations. "Our outlets selling high-end bags and jewellery will still be located in busy areas such as Causeway Bay and Mong Kok, but for every five such outlets, we will open a big store selling second-hand clothing and accessories. They will be located in areas such as Lai Chi Kok and Kowloon Bay, with relatively cheap rent," said Hiro Chan Sun-yung, a partner and director of Best Buy, adding that they aimed to keep rent at about 15 per cent of their costs. High rents and high stock levels have been blamed for the shrinking profitability at Milan Station. The group - which focuses on selling expensive vintage handbags costing, in some instances, hundreds of thousands of dollars - has found itself facing tight liquidity as inventory remaining unsold for 90 days surged to HK$8 million last year from HK$1.5 million in 2010. "More affordable but high-quality used bags will become more popular over the next five years, along with household and personal accessories," Chan said. Best Buy, which plans to open about eight shops in Hong Kong, Macau and the mainland by 2014, said it initially would mark down prices by between 3 and 5 per cent to compete with its Japanese rival Brand-off, which already has six stores in Hong Kong and plans to open up to 100 outlets on the mainland over the next three years. Chan said Best Buy would also provide maintenance services for watches and jewellery and offer higher prices for collectibles. It plans to launch an online store next month.