The pre-owned fashion sector is experiencing rapid growth during the on-going pandemic. In the current scenario, the growth is being driven by most of the younger consumers who now focus on circularity when making purchases, as well as on sustainability and trends for social shopping and online communities. The amount of secondhand pieces in people’s closets is predicted to grow from 21 per cent in 2021 to 27 per cent in 2023. As for the value of the secondhand sector, it is expected to be worth over $ 60B (approx €49.75B) by 2025.
In a recent development, Paris-based Vestiaire Collective, a global marketplace to buy & sell luxury, pre-owned fashion products, has secured €178M in a fresh round of funding.
This round has granted Vestiaire Collective the “unicorn” status as the company is in a position for its next cycle of accelerated growth following its transaction volume growth of over 100 per cent year-on-year.
Investors in this round
The round was backed by the global French luxury group Kering, and US investment firm Tiger Global Management.
Kering manages the development of a series of renowned brands in fashion, leather goods, jewelry and watches: Gucci, Saint Laurent, Bottega Veneta, Balenciaga, Alexander McQueen, Brioni, Boucheron, Pomellato, DoDo, Qeelin, Ulysse Nardin, Girard-Perregaux, as well as Kering Eyewear. In 2020, Kering had over 38,000 employees and revenue of €13.1B.
Speaking on the development, Griffin Schroeder, a partner at Tiger Global, says, “We are excited to support Vestiaire Collective’s continued global expansion plans, which focus on seizing the momentum of already spectacular growth in the US and the Asia Pacific. As of January 2021, local sellers in those regions had increased their items sold by more than 250 per cent year-over-year.”
In addition, existing investors also participated in this round including Vestiaire Collective’s CEO, Max Bittner; Bpifrance (Large Venture); Condé Nast; the Eurazeo Group (Eurazeo Growth and Idinvest Venture); certain funds managed by Fidelity International; Korelya Capital (backed by NAVER); Luxury Tech Fund (LTF & Cuir Invest); and Vitruvian Partners.
About Vestiaire Collective
Vestiaire Collective was founded in 2009 by Alexandre Cognard, Christian Jorge, Fanny Moizant, Henrique Fernandes, Sebastien Fabre, and Sophie Hersan. It is a social commerce platform that enables people to buy and sell luxury, pre-owned fashion products.
The company curates and connects the desirable wardrobes and provides a trusted and sustainable new way of buying and selling pre-loved items. It is focused on transforming the fashion industry for a more sustainable future by promoting the circular fashion movement as an alternative to overproduction and overconsumption, and the wasteful practices of the fashion industry.
Use of the funds
Maximilian Bittner, Vestiaire Collective’s CEO, says, “The resale sector as a whole is experiencing rapid growth, especially amongst Millennial and Gen Z consumers, which will come to shape the retail landscape of the future. We are incredibly excited to welcome Kering and Tiger Global Management, both of which will be instrumental in our mission to build a more sustainable fashion industry and further grow our incredible global community.”
The company will use the capital to scale up its technology and data innovation roadmap, accelerate its circularity vision along with initiating strategic change in the fashion industry.
The sustainability roadmap will be focused on four main innovative pillars:
- Triggering change in luxury fashion: the “Brand Approved” service
- Empowering and growing its community of ‘fashion activists’: the ‘Fashion Activist’ badge and ‘Follow the Leaf’ program
- Reducing environmental footprint: carbon neutral by 2026
- Being an exemplary company: B Corp certified business
François-Henri Pinault, Chairman, and CEO of Kering, says, “Pre-owned luxury is now a real and deeply rooted trend, especially among younger customers.”
What is a “Brand Approved” service?
The global fashion industry produced around 2.1 billion tonnes of Greenhouse Gas (GHG) emissions in 2018. Vestiaire Collective offers a key solution to this challenge, facilitating an increase in reuse and reduction of waste.
The company believes that emphasising the importance of durability and extending the lifespan of pieces will help combat the negative environmental impact of over-consumption.
Hence, to resolve this challenge, Vestiaire Collective has launched a “Brand Approved” service, offering a buy-back circular solution for brands, supporting the decoupling of economic profit from the use of natural resources.
The new program was recently launched in collaboration with Kering House Alexander McQueen, empowering the brand to integrate circularity into its business model.
Vestiaire Collective’s community mission
Since its inception in 2009, Vestiaire Collective’s mission has been to extend the lifecycle of products in the fashion industry, supporting a disruptive move towards a circular economy by empowering a community of “fashion activists” to drive profound change.
Vestiaire Collective provides its “fashion activist” community with inspiration, tools, and features to lead the change as they sell and buy pre-loved pieces from each other’s wardrobes. The platform has a highly engaged activist community, and it claims to have a rare, desirable inventory of 3 million items that includes 140,000 new listings every week.
Vestiaire Collective is a member of the Ellen Macarthur Foundation, Paris Good Fashion, and the UN Fashion Alliance.
Aims to become carbon neutral by 2026
The company says, by buying pre-owned goods, the environmental damage caused by fashion production can be reduced by up to 91 per cent. As part of the sustainability strategy, Vestiaire Collective has just completed a full lifecycle assessment, and the business is now focused on becoming carbon neutral by 2026.
They have initiated a carbon emissions reduction roadmap, working to reduce shipping distances through a local-to-local scheme and expansion of their direct shipping. With over 50 per cent of orders now completed through direct shipping, the service has already saved over 1,150 tons of CO2 since launching.
In addition, the business looks to offer more green shipping options and has launched it’s new “less is more” packaging that is 100 per cent reduced, recycled, and recyclable.