Tag Archives: second hand

Thredup, now public, wants to break the resale technology for fashion brands | Instant News


Thredup, now a public company, is looking to build a resale technology solution for brands alongside its customer markets.

Thredup raised $ 168 million with a market value of $ 1.3 billion in an initial public offering (IPO) on Friday. Its stock jumped from $ 14 to $ 20. With 1.24 million active buyers, 428,000 active sellers, and $ 186 million in revenue in 2020, it’s not profitable yet. But Thredup, which keeps inventory from sellers, is betting that its white label technology could help not only the brand but its own profitability.

Competition in resale has surged in the past year, with increasing industry attention to the second-hand market, due to its relevance among younger customers, substantial growth and sustainability metrics. Thredup is the second resale company to go public this year, afterwards IPO January Poshmark and RealReal in 2019. Paris-based Vestiaire Collective created a A $ 216 million deal with Tiger Global Management and luxury conglomerate Kering, which takes a 5 percent stake. The resale market is expected to reach $ 36 billion by 2024, representing a compound annual growth rate of 39 percent since 2019, making it the fastest growing sector in retail, according to a January 2020 survey from GlobalData.

But while luxury brands may want more revenue from and control their brands in the secondary market, they are less willing and unable to spend 10 years and hundreds of millions of dollars investing in the robust infrastructure and technology needed to support them, says Neil Saunders, managing director of GlobalData’s retail division. As such, they are increasingly considering partnering with technology platforms, flooded with VC cash and scale-dependent, for branded “white label” resale technology from a customer-facing perspective.

“Brands want to play on the resale, but it is difficult to allow resale on a large scale and get the unit economy to work at a lower price point,” said Ainslee Withey, managing director at Barclays Investment Bank, which is an underwriter for Thredup’s IPO. Among the technological challenges are the ability to predict the ideal resale price, the ability to automate unique and unpredictable inventory orientation, and the ability to make personalized recommendations from a multitude of unique items. Because of this, he said, “There are clear partnership opportunities with resale technology platforms. And once they reach a certain scale, they can grow exponentially. “

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Used clothing: Luxury label ‘future is in buyers’ wardrobe | Business | Economic and financial news from a German perspective | DW | Instant News


“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.

GenZ is adopting secondhand fashion more quickly than any other age group

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.

Antonia Barthel wearing Chloe's handbag

Antonia Barthel from Munich was able to buy a high-end brand thanks to the resale platform

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.

The infographic shows the growing share of the used goods market

Used goods are expected to claim the second largest market share after off-prices, while department stores are expected to lose market share

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.

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