November 3, 2024

Sandobap

Everyday Fashion

Resale Is Fashion’s Most Important Growing Sector

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Online resale is experimenting with having a brick-and-mortar presence too. Neiman Marcus Group acquired a minority stake in Fashionphile three years ago. Fashionphile now has 10 locations in Neiman Marcus stores where sellers can sell their luxury items directly to customers. “This [is] the first major luxury retail environment where customers can walk in with last season’s handbags and receive a credit to walk out with this season’s handbag or a Neiman Marcus gift card that includes an additional 10% bonus on the buyout value,” Davis says. 

ThredUp, meanwhile, is expanding its partnerships with major retailers. Utilizing ThredUp’s Resale-as-a-Service (RaaS) platform, Walmart, Adidas, Target, and more are offering resale on their own sites. Wells Fargo analysts have said this could potentially end up being more lucrative for the company than its own resale platform. 

​​”Traditional retail isn’t set up to intake, process, price, and sell millions of unique items. ThredUp, on the other hand, has spent the last 12 years building the infrastructure to power resale at scale,” Wallace says. 

Other retailers are expanding into the space. Nuuly, owned by URBN (the parent to Urban Outfitters), initially launched as a fashion rental platform in 2019, and in 2021 decided to expand into resale. “Rental and resale are natural partners that can benefit from each other in the same ecosystem,” Kim Gallagher, Nuuly’s director of marketing and customer success tells Glamour. “Whether [customers are] looking to extend the life cycle of their own garments by selling them on Nuuly Thrift or taking part in the ‘don’t buy new’ movement and renting their wardrobes, we’re here to help them.”

Meanwhile, fashion brands, many of which either ignored resale or actively tried to fight its growth, are increasingly dipping their toes into the pool. 

Accessories brand Dagne Dover launched resale—which they call Almost Vintage—on its site in mid-2021. “There were already Facebook groups where we were seeing resale activity,” Dagne Dover cofounder and COO Deepa Gandhi tells Glamour. “There were already people selling Dagne on Poshmark. We just wanted to pull that experience into our channel so we could control it.”

Gandhi says it’s still a small part of the overall business but thinks it won’t be long before the offering is fairly ubiquitous among brands. “This is just another way for brands to get first-party data, and I wouldn’t be surprised if it becomes an unofficial requirement for ESG [environmental, social, and corporate governance].”

Direct-to-consumer workwear brand M.M.LaFleur also has delved into resale recently. “We wanted to launch resale as a part of our sustainability road map for a long time, but we didn’t have the resources internally to scale it,” Sarah LaFleur, founder and CEO, says. Initially, M.M.LaFleur partnered with ThredUp before utilizing the company Archive, which gives it and other brands operating systems to launch platforms to resell their own preowned designs on their sites. 

Coach has taken a different tack with its offering (Re)Loved, selling vintage pieces, deconstructed and repurposed used pieces, and customized one-of-a-kind pieces made from secondhand items. The limited-edition drops regularly sell out each month. 

“[We are] offering new circular pathways to give these products a second or third life and thus keep them out of landfills,” Joon Silverstein, Coach’s head of digital and sustainability, said.

Despite the growing number of companies eyeing and entering the resale market, making resale profitable and scaling these businesses has been difficult. And with more and more competition in the space, it’s only going to get harder. 

The RealReal showed a net loss of $236 million in 2021. The company doesn’t believe it will be profitable until 2024. ThredUp had a net loss of $63.2 million in 2021. And while Poshmark has been profitable in some quarters, it showed a loss in the most recent quarter. 

“There’s a lot of manpower involved in resale—some of these companies are handling intake and inventory for a lot of unique products, they are making sure items are authentic—there is a significant checklist,” Ceci said. To be successful for the long haul, a resale company needs to have a strong strategy that differentiates its brand, operational and logistical capability, and marketing, Ceci tells Glamour.   

“Everyone is trying to figure it out, including Amazon,” Ceci said. “It’s going to take some time to get worked out.”

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