Why luxury brands like Gucci and McQueen are embracing secondhand

The resale trade is rising explosively, with gross sales accelerating in the course of the pandemic, and luxury brands have blended emotions about it. Chanel, for example, has sued TheRealReal and What Goes Round Comes Round, claiming secondhand shops are “piggybacking on [its] fame.” Ahead-thinking luxury brands aren’t resisting or ignoring resale, although—they’re embracing it.

Living proof: Kering—the luxury conglomerate that owns Gucci, Balenciaga, and Alexander McQueen—simply introduced a $216 million funding in a French secondhand market known as Vestiaire Collective. This partnership is supposed to speed up Vestiaire’s development throughout the fast-growing resale sector, whereas giving Kering a technique to discover potential new income streams from secondhand items.

Grégory Boutté, Kering’s chief shopper and digital officer, acknowledges that the luxury sector has had a troubled relationship with resale prior to now. The resistance is sensible: Luxury homes spend hundreds of thousands on branding and creating high-end experiences for purchasers, all of which helps to justify the excessive value of the products they promote. When used variations of their merchandise pop up on secondhand websites, the corporate now not has management over how their model is perceived.

[Screenshot: Vestiaire Collective]

However Boutté says Kering has been paying shut consideration to the rise of the resale sector, which is at the moment valued at $28 billion and is rising 25 instances sooner than the general retail market; it’s forecast to achieve $64 billion within the subsequent 5 years. He factors out that younger customers are notably drawn to resale. “We care loads about controlling the client’s expertise,” says Boutté. “However we additionally understand that resale goes to develop whether or not we like it or not. So we wish to play an lively position in shaping it, and defining our personal place inside it.”

Over the previous two years, we’ve seen how luxury brands can associate with resale platforms. Stella McCartney gave prospects $100 in store credit for promoting objects on TheRealReal. In the meantime, Gucci launched its personal branded microsite on TheRealReal with curated secondhand merchandise. In every of those instances, the corporate was in a position to higher management its branding throughout the resale ecosystem.

From Kering’s perspective, partnering with resale platforms may additionally result in extra income for its brands. Kering explored a model of this earlier this yr, earlier than its funding, wherein Alexander McQueen partnered with Vestiaire on a program known as “Model Accepted.” The luxury label contacted its greatest prospects, providing them retailer credit score to return clothes, equipment, and sneakers from earlier collections, which might then be offered on Vestiaire.

Resale corporations, together with some style brands, have made the case {that a} thriving secondhand market is best for the planet, as a result of it permits merchandise to flow into within the financial system for longer. One environmental group discovered that extending the lifetime of a product by 9 months decreases its carbon footprint between 20% and 30%. Nevertheless, it’s potential that each one of those partnerships really encourage much more consumption. Actually, a survey carried out by Vestiaire and BCG discovered that 32% of respondents offered secondhand items in order that they might purchase new merchandise. Certainly, Alexander McQueen’s partnership with Vestiaire is designed to encourage the model’s prospects to buy much more often.

Maximilian Bittner, Vestiaire CEO, factors out that it’s nonetheless early days for the present iteration of the resale trade, and there’s nonetheless loads of analysis to be executed with a view to higher perceive how the secondhand market will influence the planet. What’s clear to Bittner, although, is that platforms equivalent to his encourage customers to think about luxury items as property, moderately than consumables, which could encourage them to take higher care of their merchandise so they keep worth for longer. “There may be nonetheless loads we have to do to work in direction of a extra sustainable style trade,” says Bittner. “However we all know for a proven fact that resale can play a strong position in making a round system.”