As part of a financing round, the French fashion group is entering the second-hand market
Source & Copyright by Vestiaire Collective
Author: Talisa Moser
- Vestiaire Collective announces €178 million financing round
- Kering joins as lead investor with a stake of nearly 5%
- This action emphasizes the importance of the rapidly growing second-hand luxury market
The French second hand platform for luxury products Vestiaire Collective, which was founded in 2009, has announced a new funding round of 178 million euros. According to an official press release, the company's commitment aims to accelerate the growth of the second-hand market as well as the shift towards a more sustainable fashion industry.
Vestiaire Collective is primarily supported by the French fashion group Kering, a luxury goods conglomerate, that - among others - owns Gucci, Balenciaga and Alexander McQueen. Kering is the first large luxury group that has entered the second-hand market. In the present first financing round, besides Kering, US investment firm Tiger Global Management is the second major investor, followed by others like the exclusive media company Condé Nast and the Eurazeo Group.
The market for second-hand luxury fashion is growing rapidly
The trend of second-hand fashion has increased significantly in recent years - also in the luxury industry. By 2023, the proportion of second-hand items in people's closets is expected to rise from the current 21% to 27%. The value of the second-hand sector is even expected to increase from USD 2025 billion to USD 30 billion by 60. According to BCGAbove all, consumers are in favor of the "sustainable aspect" of second-hand fashion. Market participants can therefore increase their sales by up to 100% annually
By reselling premium goods, large luxury companies in particular are making a statement against the fast-fashion movement and extending the life cycle of their products. "Second-hand luxury is a real and deep-rooted trend today, especially among younger customers. Rather than ignoring it, we want to take this opportunity to increase the value we offer our customers and influence the future of our industry towards more innovative and sustainable practices," explains François-Henri Pinault, CEO of Kering.
This is also the case with Vestiaire Collective, which was able to increase its transaction volume by over 2020% in 100. With the million-dollar investment, the company is positioning itself for accelerated growth this year as well. The focus on sustainability as well as the growing trend towards social ShoppingAccording to the CEO of Vestiaire Collective, Maximilian Bittner, they were particularly driven by younger consumers, i.e. millennials and Generation Z.
The goals of Vestiaire Collective
Since its founding in 2009, Vestiaire Collective has made it its mission to extend the life cycle of products in the fashion industry as well as to support the development of a circular economy. In doing so, the company relies on four pillars:
- The "Brand-Approved" service:Driving change in the luxury fashion industry
- The "Fashion Activist" badge:Strengthening and growing the fashion activist community
- CO2-neutral by 2026:Reduction of the ecological footprint
- B Corp Certificate:Exemplary and certified company by Benefit Corporation
As recently announced, Kering brand Alexander McQueen now wants to work especially closely with Vestiaire Collective through its new "Brand Approved" authentication program. Submitted products will be checked and evaluated for authenticity by the label. Customers then receive a voucher with which they can shop in Alexander McQueen brand stores. The cooperation is intended to actively promote circular fashion in particular.
Conclusion: cooperation as part of the change
Collaborations between big brands and second-hand platforms are not uncommon today and have much more potential for synergies than pure reselling. Since 2018, Burberry, Stella McCartney and Kering brand Gucci have already entered into successful collaborations with The RealReal platform. Industry leader LVMH also announced that the group is already looking for ways to resell its products in a circular system.
The main obstacle is the authentication of branded products. This is confirmed by a current legal dispute between The RealReal and Chanel, due to the sale of counterfeit handbags. In addition, luxury brands, more than other companies, control their pricing and distribution. These need to be adjusted in circular fashion retail. However, as the luxury market transforms and the demand for second-hand grows, luxury companies can no longer ignore this movement, nor do they want to.