Who would have ever predicted the words ‘resale’, ‘upcycle’ and ‘recycle’ would ever be used to define the luxury fashion and goods market as we know it today? Well, it looks like Kering had somewhat of an inkling, as it is now certainly the case for pre-loved luxury goods which are having more than just their moment.
Paris based luxury fashion resale market leader, Vestiaire Collective, has taken the lead in implementing and promoting longevity, sustainability, and lack of disposability by emerging as an upscale digital player. The pandemic has done nothing less than accelerate this trend too, with e-commerce and DTC initiatives having expanded exponentially over the last year. The success of platforms like Vestiaire may come as a shock to some, especially when considering that the target market of second-hand customers are more likely to be exposed to unemployment, and so buying a second-hand Saint Laurent Sac de Jour may not strike high on the list of priorities. However, Vestiaire has proven that buying pre-owned and pre-loved luxury items has been immensely successful and is the way forward for many.
So much so, that Kering has just led a $216 million funding round for Vestiaire, acquiring a 5% stake in the company. Kering was alongside American investment firm Tiger Global Management, and existing investors such as the company’s CEO, Max Bittner, and Vogue’s parent company Condé Nast, to take the company to Unicorn status (being a privately held company with a valuation of over $1 billion). Vestiaire don’t plan on stopping there either and are aiming to file an application to become a B Corp certified business in due course, following their sustainability roadmap as part of their expansion plan.
Kering’s plans to accelerate Vestiaire Collective’s growth is certainly not limited to funding, with Kering-owned fashion house Alexander McQueen launching a new pioneering initiative in collaboration with Vestiaire, aptly dubbed the ‘Brand Approved’ programme. The initiative mirrors McQueen’s standing commitment to promote durability in the luxury fashion market, with the collaboration choosing a number of clients to sell back a McQueen piece they own. McQueen will assess and authenticate the pieces, and the client will subsequently be issued a credit note for them to use to purchase new items at select McQueen stores. The pre-owned piece will then be processed by Vestiaire and be exclusively available on the Brand Approved page on Vestiaire’s website. This introduces an innovative take to the traditional sense of recycling, encouraging a shift in the way fashion is currently consumed and produced.
So, what does Vestiaire Collective’s raging success and expansion roadmap tell us about the state of the current luxury economy? That sustainability, durability and reducing fashion’s environmental impact and carbon footprint is leading the stakeholder capitalism movement and systematic change in the industry. Not only that, but in light of the current global pandemic, online retail and e-commerce has emerged as a booming industry that shows no signs of stopping down. While the closure of physical stores had initially negatively impacted the economy, consumers have naturally shifted to e-commerce out of necessity but also convenience. And putting it into an elaborative perspective, luxury resale e-commerce has entered the building and has no plans of leaving. Vestiaire recently noted that “the amount of second-hand pieces in people’s closets is predicted to grow from 21% in 2021 to 27% in 2023 with the value of the second-hand sector forecasted to be worth over $60 billion by 2025”.
François-Henri Pinault, Chairman and CEO of Kering, said:
Pre-owned luxury is now a real and deeply rooted trend, especially among younger customers. Rather than ignoring it, our wish is to seize this opportunity to enhance the value we offer our customers and influence the future of our industry towards more innovative and more sustainable practices. This fits naturally with our entrepreneurial spirit, our pioneering sustainability strategy, and our modern vision of Luxury.
And this isn’t Kering’s first rodeo in the resale market either. Read more about the impact of Kering’s investment and entry into the resale market here.
Kering’s investment has undoubtedly marked a pivoting moment in luxury brands participating in the resale market. What was once a taboo of luxury is now evidently a fast-expanding sector, and Kering is the first to grab a generously frosted slice of the luxury resale e-commerce cake. Who will now follow suit?
Want to join The Collective, and contribute to the debate?
Email us at: The.Collective@lewissilkin.com