After cash-strapped Chen Xi sold a stack full of clothes, including an antelope leather jacket worth 10,000 yuan (US$1,250), for a couple of kuai to a peddler who purchased used cloth by the kilogram, it hit the 23-year-old that there was a gap in the retail market.

The city, she realized, was lacking second-hand luxury outlets.

Over 20 such shops used to exist in Beijing. Then in the face of plummeting sales during the SARS outbreak, all were closed and few reopened.

"It's almost a universal trait of women to buy clothing without thorough consideration," says Chen, a chemical automation major who found herself without a job and in financial straits after graduation. "Everyone, no matter what their social status is, has purchased apparel and then decided that it just wasn't right for them.

"For whatever reason, some of these items aren't returned to the retailer and eventually the owner just wants to get rid of them without incurring a total loss. I wanted to help."

It took six months for Chen's observation to develop into a business model. By January, her college friend Li Daming agreed to invest in the venture and the second-hand luxury shop Discover was officially born.

Contrary to common assumption, second-hand luxury stores are not necessarily aimed at middle-class consumers. It is true that a majority of the inventory consists mostly of lightly used products that are made available to shoppers unable or unwilling to pay retail prices. That said, Discover also offers merchandise priced above the retail value, due to uniqueness or artistic value. This attracts a second type of customers.

Before finding Discover, customer Zhou Wei shopped exclusively at commercial gallerias where she could stock up on the latest pieces from her favorite designers. Then Discover sold her a limited edition Nike handbag that few fashion enthusiasts were aware of. Now she seldom appears in public without it.

Customers like Zhou are the primary reason second-hand stores survive in a season-driven industry.

"We know that second-hand stores usually cannot keep up with the pace at which fashion changes," says Discover's investor Li, 28. "And we don't have a remedy. But we hope that our customers will be interested in the products we offer because of their artistic value rather than their glamour. That would make us immune to such changes."

Customers may find a variety of luxury brands at the second-hand store.

One market sector Discover hopes to win over is the same one whose search for glamour fuelled the counterfeit industry. But Li and Chen take faith in how China's attitude toward name brands is changing.

International designers that once ignored Chinese luxury markets are now scrambling to save their identities from counterfeiters, with European powerhouses Prada and Louis Vuitton leading the way. And high-end department stores like Saks Fifth Avenue, which in April announced plans to open its first location in China by 2008, are right on their heels with less-familiar but equally prestigious labels.

"That's why my job is so exciting," says Chen. "I've finally found my passion, and it's a culture that's being increasingly appreciated in Beijing." The culture she speaks of is one that respects high-end designers for the way their products amalgamate art and heritage.

Both Chen and Li admit that their expansion campaigns are only on the drawing board. In the long run, they want Discover to be identified with second-hand luxury in the same way that the Walt Disney Company dominates animation films.

"But in the meantime," Li insists, "we're just trying to keep a positive balance sheet and make a good impression on customers."

In fact, the terms "buy" and "sell" are rarely used, because they suggest financial motivation. Chen prefers to think of Discover as a place of education and exchange.

"I opened this store because I love fashion," she says. "I love discussing it, brainstorming about it, sharing it with others. And I hope that I'll be able to pass that on everyone who steps into our shop."

It's 5:17 PM at Discover, and the door slides open as a woman commuting home steps in. "I saw the Prada logo in your window and remembered your ad online," she says. "I love fashion but don't know anyone else who enjoys discussing it the way that I do." That's what Chen wants to change.

Discover is located on the ground floor of Idea Enjoy Town (Sankongjian,) on the North Fourth Ring Road, Beijing. 131-6428-8125.

(China Daily August 18, 2006)