Rebag.com, The Realreal, MyPrivateDressing, Farfetch, The Outnet, Resee, Break Archive, Poshmark, Tradesy, ThredUp, Vinted... the number of sites joining the ranks of the first pure players and leaders in luxury goods resale continues to grow. Some of these names were already active in resale, but have now opened a luxury corner.
As the trend continues, they have been joined by auxiliaries such as Reflaunt, which acts as an intermediary between major brands and second-hand sellers, and LuxPrice-index, the first luxury auction house created by Collector Square, which lists the official world auction prices. Given this success, the famous Sotheby's has also decided to step down from its pedestal and launch Buy Now, a platform designed to win over a clientele that is not an auction expert.
What can you find on these sites?
As mentioned in the preamble, it's no longer just watches. For the past ten years, buyers from all over the world have been able to sell their old handbags, small leather goods, jewelry, shoes and, on the bangs, clothes.
But not all second-hand luxury is equal. For that matter, we no longer say "second-hand", which sounds too populist, but "vintage", or even better, "pre-loved".
There is luxury that depreciates, and luxury that increases in value with age, such as vintage cars, paintings or exceptional wines. In this game, the emblematic French and Italian brands, those that boast a historical roots, an illustrious heritage or artisanal know-how, and embody the quintessence of luxury, hold their own against their competitors.
Hermès, the undisputed leader
The legendary handbags of the French company - Birkin, Kelly, Constance - are the most sought-after, and therefore the most valuable. The price of older models can be multiplied by 3, 5, 10 or even 35. In 2019, for example, a Birkin Faubourg sold for 158,000 euros on Vestiaire Collective. Three years later, one of its big crocodile brothers fetched a record price of $380,000.
The rarity of certain models makes them priceless. Remember that at Hermès, supply is systematically lower than demand, and that it's not enough to walk into a boutique armed with a checkbook to buy the leather grail. You have to register with the company, and wait as long as it takes before you can hope to earn the right to spend ten thousand euros on a new bag. The quality of the leathers, which 20 years later have lost none of their superbness, also justifies maintaining the price.
Behind Hermès, the most popular brands are Chanel, Dior, Saint Laurent, Gucci and Louis Vuitton. And since the latter have not organized the shortage of their products as meticulously as Hermès, they are sometimes subject to depreciation of 15 to 40% (which is still respectable, we agree, for a bag that has already been worn). If some of their legendary and timeless models - Chanel's Timeless, Boy, 19 and 2.55, or Dior's Lady Dior - are also selling for more than new, it's a far cry from the Birkin's mother. Louis Vuitton handbags, for example, lose an average of 40% of their value on resale, according to The RealReal.
There are also fashion phenomena that follow entertainment hits. The release of the series Emily in Paris, in which the protagonist wears an iconic Courrèges jacket, for example, caused searches for the French brand to soar by +377% on the web.
Last but not least, among the most sought-after models are limited editions, items from temporary collaborations, those whose designers have passed away (such as Karl Lagerfeld, the face of Chanel, whose death caused a bubble on his latest creations, or Virgil Abloh, former artistic director of men's collections at Louis Vuitton), and rare leathers: a besace in grained Dalmatian calfskin by Hermès, a leather no longer produced, changed hands for 44,900 euros.
With the exception of this exceptional sixte, all luxury brands have suffered a sharp decline in value over time. Because the quality of the products is inferior, because the houses have not succeeded in creating timeless models, because the brands enjoy less fame. All of which means that small budgets can afford Balenciaga, Prada or Burberry at rock-bottom prices.
Resellers and Gen Z
Dedicated websites such as Vestiaire Collective in 2009 or Collector Square in 2015, were born out of the long-term value of luxury items. These platforms have invested in the younger generations. Indeed, Millenials and Gen Z, who don't always dare enter ultra-gentrified boutiques, are among these portals' most active customers. According to a study by the Boston Consulting Group, 70% of second-hand buyers are taking their very first steps into the world of luxury thanks to vintage.
Better than traditional luxury craft houses, resale platforms have mastered the codes of social networks and the digital language of the younger generation. Collector Square now boasts 65% to 70% of its sales online, reversing the initial trend.
It's also worth noting that the money never goes very far from the platforms, since almost 2 out of 3 sellers reinvest their earnings on these same sites (according to the Swiss daily Le Temps). Virtuous and prolific.
Stealing customers from luxury houses, revealing revenues that would make major brands pale in comparison, banking on the good conscience that comes with circular practices, putting on an air of eco-responsibility These platforms have slowly but surely aroused the curiosity of the original producers.
When luxury takes an interest in second-hand goods
Among the first to leave Paris' luxurious Avenue Montaigne and Place Vendôme to rub shoulders with the mainstream was Kering. In 2021, Gucci's parent company has taken a 5% stake in Vestiaire Collective, the fast-growing French company valued at $1.4 billion in 2022, which is aiming for an IPO in 2025 if it achieves its profitability target this year. This will also boost Kering's accounts, which are fragile compared with those of its great rival LVMH.
Stella McCartney (formerly owned by Kering) and Burberry have also teamed up with TheRealReal as a temporary partnership to encourage the resale of their products, giving the site added credibility and notoriety.
Participating in the second-hand market would also be a marketing argument. According to a study by the Boston Consulting Group and Altagamma, 72% of Generation Z consumers would consider a company's commitment to sustainable development when making their purchases. A number of brands have therefore developed their own resale platforms, such as Balenciaga with its Re-sell program, Chloé with Digital ID, or Rolex, which has launched a lucrative manufacturer-certified pre-owned watch program. A way of controlling the chain (and revenues) from end to end, in an economic environment where luxury is suffering from a loss of momentum.
What are the advantages for the major brands?
As well as reaping the financial rewards of these successful platforms, there are numerous advantages for luxury houses.
By participating in the product authentication process (the lifeblood of the platforms, since their entire credibility rests on the quality and purity of the items), brands actively combat counterfeiting, their sworn enemy.
Without having to invest in platforms, manufacturers (even if they keep quiet about it) keep a close eye on retailers. This vigilance enables them to assess the desirability of their brands at zero marketing cost. The lower the discount, the more popular the item. The more you have to discount to get rid of a bag, the less the designer is in the limelight. Simple as that.
In the context of a brand redesign or a change of designer, this information is a valuable clue as to the merits and success of the transformation. Italy's Salvatore Ferragamo, for example, has reinvented itself and bounced back in real time and in vintage, while Burberry, suffering from an aging image, is falling both in the city and at resale.
By cooperating with vintage players, they gather customer data - age, origin, tastes - and learn a great deal about their future buyers, the markets to attack, the colors to favor, as well as their pricing power.
The latter is also valuable information for stock market investors (ah, we're finally talking about you!). It would appear that retailer data, such as that from WatchCharts (a specialist in watches), was being traded like investment advice: unsurprisingly, the shares of the most prominent manufacturers would have the most glorious stock market histories.
In the case of Hermès, which values exclusivity too much to play the intermediation game, the advantage belongs to the customer: no more waiting lists, and no more discrimination on the basis of race. All you have to do is pay for the product you want, and the impenetrable fortress is just a chequebook away.
Neglecting this growing market is not without risk for brands: they would be letting the cake slip into the hands of the platforms they have so long disdained. Indeed, the luxury goods resale market has grown from 1.5 to 2% of the total luxury market in 2014 (Xerfi), to 7 to 9% in 2020 (IntoTheMinds), to 12% in 2023 (Bain & Company).
Not all is rosy in the land of resale
Despite this success story, the recent multiplication of players is ultimately damaging the vintage luxury market. In the land of resellers, as in the land of luxury, not everyone is on the same footing. Shares in The RealReal have fallen by over 90% since the company's IPO in 2019. Farfetch shares, which have rebounded by +140% since the start of the year, are still down +99% since the IPO.
In figures
In 2020, the total second-hand luxury goods market was estimated at 25 billion euros by Intotheminds; in 2021, Boston Consulting Group put it at 36 billion euros. In 2022, Bain & Company put the figure at $16 billion, then just one year later, in 2023, at over $49 billion, a sign of the sector's meteoric growth. In 2024, the second-hand luxury sector is expected to reach $51 billion, according to Fashion Network.
These same research firms estimate the market's annual growth at between 10 and 15% per year, depending on the report, compared with 2% annual growth for new luxury between 2015 and 2018 (according to Bain & Company). Note that at Vestiaire Collective, the Vintage category gained 140% per year over the years 2020-2022, with global sales up another 25% in 2023 (Reuters).
(You'll certainly have recognized below the new fashion icons, sisters Kim and Khloe Kardashian, illustrated by our designer Amandine Victor).