“There’s always the sensation of finding something really cool, something you’ve always wanted but never been able to afford. Suddenly, it pops up on your screen,” Antonia Barthel told DW. A 27-year-old from Munich perusing high-end resale platforms every week, hunting for second-hand luxury clothing.

It was customers like him that caused fashion labels to reconsider their stance on the resale sector. Earlier this month, Kering, the luxury giant that owns brands such as Gucci, Alexander McQueen and Balenciaga, acquired a 5% stake in France’s high-end resale platform, Vestiaire Collective. Resale market previously shunned by luxury fashion houses, which were careful to give up control over the distribution, prices, and perception of their goods. Dry Investment could signify a wider pivot towards resale in the industry.

Francois-Henri Pinault, chairman and CEO of Kering, said in a statement: “The former luxury is now a real and deeply entrenched trend.”

Preloved: Image transformation

The image of shabby, used clothes gradually faded. Preloved is the new motto of many young fashionistas.

“I never cared if it had been worn before. It felt new to me,” said Barthel.

The fact that glossy no longer has to mean new is “just a contemporary approach for fashion designers,” Max Schönemann, CEO of German luxury fashion resale platform Rebelle, told DW.

Resale is on the rise

While the fashion industry is projected to suffer the biggest financial hit in decades during the pandemic, the resale industry is booming. Through resale platforms such as Vestiaire Collective and Rebelle, consumers are selling unwanted clothing directly to other consumers online. Vestiaire Collective grew by more than 100% in the last year. 140,000 new items are now uploaded to the platform every day.

“The last few months have been the best in the history of our business,” Rebelle’s Schönemann told DW.

Resale platforms are hugely popular with millennials and Gen Z., which are more economical and focus more on sustainability than the legacy consumer segment. By ignoring the used goods industry, luxury fashion brands have missed the opportunity to attract a large market.

The current investment in Kering is aimed at “recruiting future customers,” Citigroup’s Thomas Chauvet told DW.

Chauvet points out that collaborating with resale sites is also a way to collect data on consumer shopping behavior and brand desires.

Affordable Luxury

Affordability is a key driver of sales of used luxury goods.

“I wouldn’t buy a Chloé handbag in a store, but I recently bought a used handbag online,” says Barthel.

This 27 year old man prides himself on having a high quality bag that has become a staple in his wardrobe. The exorbitant price tag means buying a luxury handbag is a distant dream for most consumers. The resale sector has brought it within reach.

The pandemic has accelerated the trend towards affordable designer fashions: About half of millennial and Gen Z adults have seen income decline since the onset of the coronavirus crisis.

By partnering with resale players, luxury brands such as Alexander Mcqueen, Gucci and Burberry are slowly trying to build loyalty with younger customers amid the pandemic’s slump. This collaboration hints at a growing attitude in the luxury sector, which welcomes frugal consumers.

“Luxury brands want to maintain a constant dialogue with clients, both through direct channels and on alternative platforms,” ​​said Chauvet.

In an effort to reach out to resell consumers and prevent counterfeiting, Alexander McQueen is partnering with Vestiaire Collective’s new “Brand Approved” service. In a first of its kind collaboration, McQueen collects second-hand goods from in-store customers in exchange for store credits. The items are then authenticated by the fashion house, sent to the Vestiaire Collective and sold online with a special approval note.

Sustainability is in vogue

While Antonia Barthel loves used goods, frugality is not her initial motivation to shop for used clothes. “Sustainability plays an important role for me. I usually don’t really care about brands,” he said.

The number of Millennials and Gen Z supporting sustainable products more than doubled between 2019 and 2020, according to Pricewaterhouse Cooper (PwC).

“The trend for sustainability has grown more rapidly during the pandemic,” PwC’s Erika Andreetta told DW.

Circular fashion model, which keeps products and materials used for as long as possible through reuse and recycling, is no longer just a keyword. As luxury players seek to increase their sustainability credentials, participating in the luxury resale sector will be essential.

“Luxury brands basically have no choice. They understand that sustainability will be the key for them moving forward. Resale is an important part of sustainability,” Clara Chappaz, head of business for Vestiaire Collective, told DW.

Chanel and Hermès charted another route

Despite the promises held by the resale sector, Dry’s pivot towards resale remains far from universal. Fashion houses like Hermès and Chanel are still against selling even their most iconic leather goods online, let alone partnering up with resale parties.

For these more traditional-minded homes, the resale revival continues to feel like losing control of things. Chanel is currently engaged in a lengthy court battle with resale platform The RealReal, accusing fake advertising and selling fake bags. The iconic fashion house claims that its shop is the only place eligible to sell genuine Chanel.

“The brands that may be more reluctant to accept the resale market are those that are positioned very exclusively and exercise tight control over distribution and pricing,” Chauvet said.

However, Chauvet hopes the brand won’t be able to stay in the resale sector for much longer. “I think the trend will be strong enough for everyone to embrace it and work together,” he said. Dry Investments will likely be the first of many luxury fashion races into the resale sector.