Whoever said wardrobes are a depreciating asset has clearly never met my girlfriends! Nor have they browsed the unicorn resale platforms that are servicing the fashion-flipper needs and the secondary buyers’ delight.
With $1.3 Trillion in annual worldwide sales, luxury is one of the largest and most diverse global market opportunities. Leading luxury houses have chased M&A opportunities to build global scale and are transacting at a pace and size that continues to accelerate. As this industry grows, so does influencer led purchases (itself an industry predicted to grow to more than double 2017 figures). At the same time, the Gen Z appetite for sustainable fashion solutions is making trusted brands rethink their old approaches. All things considered it makes sense that the resale market for luxury items, a beautiful way to prolong the life of valuable fashion, is accelerating at high speed.
Trainer trading is now more than a hobby; Yeezy’s are creating income streams surpassing most part-time jobs. Whilst #ebayforsalaries, itself a catchy tagline, is moreover a lifeline for gig economy or contract type workers who find themselves short that month.
So it’s no surprise that Bain predict luxury resale will occupy 20 percent of the global luxury market by 2025. Meanwhile ThreadUP predicted a $51bn dollar secondary market by 2023, practically doubling the size of the current market value. It’s a Golden Age for fashion-flipping…
Right now, the space is occupied by some well-known incumbents, like the TheRealReal. Following a Series G raise of 115m in June 2018, this May their IPO not only raised sizeable cash but also eyebrows after achieving a share price of $28.90, up 44.5%, giving them a market cap of $2.39 billion.
Seemingly May 31st proved to be a really good day for resale, but it’s not the only secondary space success. In the last 18 months we’ve witnessed a love affair for online resale platforms; Richemont took WatchFinder into its stable; Farfetch acquired secondary sneaker site Stadium Goods for $250m and StockX raised $110m in their latest Series C fundraise, with many of these platforms being backed by luxury conglomerates and leading venture partners.
Secondary continues to show an upward trajectory and that’s exciting. It means there’s room for new players and definitely room for better product. If you’ve used any one of these platforms, you’ll know that they come with their own pain points. After flipping fashion for the last 10 years and prolifically in the last six months (research, obviously), high commissions, time heavy transactions, bad community behaviour and more pertinently rising counterfeit cases are creating a need for more lateral thinking solutions that look to cure and more easily release the value of our closet favourites.
Gratuitous high five for our Little Black Door; for the last 8 months we’ve been designing a solution that works more laterally for the luxury resale space, creating smarter tech and a more user positive business model that will reduce frictions to sell. Why? Because in an age of e-receipts and digital data, we should be able to easily capture, see and release the value of our previous and treasured purchases. So we’re rising to the challenge.
In sum, I guess it’s a case of…
(Wait for it)
Watch this space!
L&M, Fashtech Ventures, Founders of Little Black Door
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