﻿This one sells between 180 and 200 thousand pounds.
Luxury fashion industry is a $300bn industry with north of a trillion
lying in people’s wardrobes. Clients are now opting to buy
something that’s pre-loved or vintage. Old is the new new in high-end fashion.
The luxury resale market was estimated to be worth around $37bn in 2021.
That’s rather nice. Even established retailers
like London’s Selfridges are selling exclusive brands second-hand.
Luxury resale was already on the rise when pandemic lockdowns accelerated online trade.
It’s estimated the second-hand luxury market is now growing more than four
times as fast as the primary trade. The world’s largest luxury re-seller,
San Francisco-based The RealReal, reported $468mn in revenues for 2021,
an increase of 56 per cent compared to 2020. Competing platform Vestiaire Collective was
valued at $1.7bn in the same year. What the guys are doing here they’re
receiving the goods onto the system. The Paris-based re-seller opened this new
UK distribution and authentication centre in January 2022.
I spoke to CEO Maximilian Bittner online from the UK hub floor, about what was driving growth.
I’m not going to hide the fact that Covid has given our business a big boost,
you know people being locked up has resulted in the need for distractions and cleaning up
your closet was one of them. But I think the overall trend of second-hand points to something
that is much greater and bigger than even Covid, which is the global warming
that we’re all undeniably facing, it’s a change in the way people think about the products they
buy and sell. There is no ignoring that. As lockdowns ease and shoppers return
to re-opened high streets, what’s sustaining the post-covid trade?
Sustainability came second in a survey of luxury shoppers who were asked why they
occasionally bought second-hand. Access to iconic, hard-to-find items
was the number one reason. Saving money was the third big factor, something
the Vestiaire chief acknowledges is a prime draw for his platform’s fifteen million members.
Price and accessibility is probably more dominant, but sustainability
is becoming more and more important. Seeking out second-hand items may support a
more sustainable, circular trade. But that doesn’t always come cheap.
I’m here to meet Claudia and see a two hundred-thousand-pound handbag.
Oh hello I’m Carola.
I’m Claudia. Good to meet you.
Around a third of the luxury resale trade is in handbags and shoes.
This Hermes “Himalayan” Birkin is a pricey example of how second-hand items can become
lucrative assets. Here’s one of the rarest
and most expensive bags in the world. So how much would a bag like this cost?
We are talking one hundred and eighty to two hundred-thousand-pounds for this bag.
And how much might it have cost when it was new?
The price was about fifty-five thousand. Other more modest pieces of luxury resale
can be had for relatively bargain prices compared to new.
Especially when exclusive labels up their prices, which happened several times in 2021.
Some luxury brands have engaged and invested in resale platforms.
But others haven’t, wary of potential erosion to their cachet and profit margins.
There is still a lot of stigma, and the big brands, apart from the few like Gucci for
instance, are still not embracing resale. But businesses and brands that only sell new
may have re-think sales strategy to remain competitive in the future.
The Industry.Fashion website suggests younger Millennial and Gen Z buyers
are set to make up almost half of the luxury resale trade by 2025.
And customer support for a circular economy was a common thread
among all of the businesses we spoke to.
We hear this day-to-day. They are looking to do their part in whatever small way it could be,
clients are now opting to buy something that’s pre-loved or vintage,
as opposed to buying brand new. That’s not to say that luxury
resale is easy, or risk-free. For example, despite record revenues,
The RealReal posted a loss of $236mn last year due to high operating costs.
And then there’s the threat from ever more sophisticated forgeries.
We have clients attempting to sell fake goods on a weekly basis. Counterfeits
alone are a multi-billion-pound industry. So it’s very, very
easy for our team to quickly identify the hallmarks of a counterfeit bag.
The Entrupy system combines AI technology with a kind of scanner
that detects microscopic mistakes in a fake. It links a subscriber’s camera phone to a vast
database of detailed images from hundreds of thousands of genuine items.
It’s really zooming in there. By comparing critical features on
these samples with images stored on the database, it can determine which is fake.
But could I tell the difference? OK, I feel a bit under pressure here but let me
see. Whichever one is the fake is good because I’m seeing little embossing the brand name on the zip,
I’m seeing it inside. I’m going to go with this is real, or it could be a trick!
You’re correct, that is the real one and this is indeed fake.
This and other emerging digital fingerprint technologies are boosting
confidence in the luxury resale trade. And despite recent falls in share-prices on
some major platforms, there’s genuine belief that second-hand fashion can only become more
attractive, as industry and consumers focus on saving money, waste and CO2 emissions.