Second-Hand Investment & The Luxury Resale Initiative
Kering, the umbrella organisation that oversees brands like Yves Saint Laurent, Balenciaga, and Gucci, has recently announced that they will be investing €216 million towards French resale company Vestiaire Collective, led by investment firm Tiger Global Management. With a significant increase in demand for the resale market, which has been forecasted to triple its estimated value of €28 billion, this new venture indicates the growing popularity of the luxury, second-hand goods market as one which cannot be ignored.
Luxury brands and the second-hand market have always had a tricky relationship. With companies like Chanel filing several lawsuits against resale brands What Goes around Comes Around and The RealReal, the influence and force of the second-hand market has been relentlessly discussed: “they [luxury resellers] are piggybacking off the reputation and appeal of Chanel, one of the most esteemed fashion houses in the world, for their own financial gain”. But should luxury fashion remain exclusive to those who can afford it?
The RealReal has since revealed that it does, in fact, carry out partnerships with luxury brands, from the single sharing of resale data to consignment partnerships and promotional relationships with like-minded companies around a shared mission. A spokesman for at least one major fashion player, Kering revealed in an earnings call this spring that it is “collaborating actively with The RealReal,” which likely explains the wide variety of “new w/ tags” Gucci sunglasses and Bottega Veneta dresses, wallets and footwear being offered on the site. This demonstrates that there is space and opportunity for multi-demographic collaboration, and the appeal of high-end, luxury fashion products is by no means exclusive – and should perhaps be more accessible to the masses.
There is also a conversation taking place about whether the products made specifically for companies like The RealReal are eco-friendly. From a luxury standpoint, out-of-season garments would need to be sold at more affordable prices for a more expansive clientbase; this would not be considered ‘resale’, as they are new rather than resold products. This approach would therefore technically be more sustainable, but if production were to increase due to specific demand, that would cease to be the case.
The RealReal’s new retail store in Chicago
There are many reasons to invest in second-hand luxury goods as opposed to fakes. Copy companies deconstruct hours of high-quality artistic creation to produce something of less worth, mimicking the technical design of how a garment looks whilst profiting from its original brand value in the process. Fake tweed jackets, skirts and embellished logomania saturate the digital markets and for a long time, copy companies went law-suit free, benefiting from the successes of those at the top but not handing over the same commission prices or shares. Resale companies can also, occasionally, be more expensive than original products, with prices inflated due to product being out of stock, or a limited-edition collaboration. This is highly unsustainable and damaging on the environment, especially when considering the transportation costs involved in extra shipping (brand to resale company, reseller to purchaser). Telfar, which has been dealing with these kinds of problems ever since the launch of its iconic shopping bag, has changed its company policy so that one single customer cannot buy an excessive number of bags. This has helped to minimise backlash from consumers who were previously unable to make purchases due to stock immediately selling out.
Second-hand products are ultimately more sustainable and less problematic for the brands that created them. Depending on the brand, there might be a direct relationship between the brand and the second-hand company, with compromises on price, whether or not a product is ‘vintage’ and its interaction with the second-hand consumer. This gives those who might not be able to afford the original product the opportunity to access high-end brands without manipulating the original brand’s marketing. Additionally, second-hand products still retain their quality of luxury exclusivity and might even be considered ‘rarer’ finds due to their reduced price tag. They do not contribute towards fast fashion and allow for a broader customer reach.
Does this mean that luxury products can maintain their exclusivity without crippling our pockets? Luxury and resale are not mutually exclusive businesses but could more aptly be described as allies and, with increasing demand for ‘vintage’ products, it’s clear that the second-hand sector has a lot of potential.