Luxury conglomerate Kering has solidified its interest in the second-hand market by acquiring a 5% stake in Vestiaire Collective, a specialized platform for luxury fashion resale. The funding round for Vestiaire Collective has raised €178 million ($213 million), with investments from Kering and American investment firm Tiger Global Management. In addition to new investments, existing shareholders have plans to reinvest following a successful 2020, which saw significant growth in transaction volume and the number of members on the site. These results can be attributed to the increased popularity of digital and e-commerce platforms during the pandemic, as well as the demand from Millennials and Gen Z for more sustainable consumption options.
The decision by Kering to invest in Vestiaire Collective demonstrates its forward-thinking strategy to cater to the next generation of consumers. Gregory Boutté, Chief Client and Digital Officer at Kering, emphasizes the significance of the luxury second-hand market, especially among young consumers. Rather than ignoring this trend, Kering aims to capitalize on the opportunity to enhance its services and drive the future of the luxury sector towards more innovative and sustainable practices. This aligns with Kering’s entrepreneurial culture, pioneering sustainability strategy, and modern vision of luxury, according to François-Henri Pinault, Chairman and CEO of Kering.
The funding round values Vestiaire Collective at over €1 billion ($1.2 billion), cementing its status as a “unicorn” in the fashion industry. With this investment, the platform plans to accelerate its expansion in North America and improve its service tools through the use of technology and artificial intelligence. Vestiaire Collective aims to expand its Brand Approved feature, which allows customers to sell and repurchase items with the endorsement and authentication of luxury brands. Kering’s brand, Alexander McQueen, recently partnered with Vestiaire Collective to launch this service. The platform also has plans to build a community of “fashion activists” and achieve carbon neutrality by 2026. Additionally, Vestiaire Collective has applied for B-Corp certification to highlight its commitment to social and environmental responsibilities.
Analysts predict that the share of second-hand items in wardrobes will increase from 21% in 2021 to 27% in 2023, according to Vestiaire Collective’s reported figures. The overall resale market is expected to reach approximately $60 billion by 2025.
