Ever dreamt of buying your first luxury handbag? With sky-high rents and a challenging job market, investing in luxury has become a more distant dream than ever for millennials and Gen Z.
Enter secondhand marketplaces, the hot destination for savvy spenders with a taste for the finer things in life.
Vestiaire Collective, a Paris-based platform, has been operating in the secondhand clothing space since 2009. Now, it’s attracting more cash-strapped consumers, particularly Gen Z and millennials who are looking for smart ways to invest in high-end pieces. “Shopping secondhand carried a lot of stigma, especially within the luxury industry,” Fanny Moizant, president and cofounder at Vestiaire told Fortune.
Luxury fashion was long thought to be inflation-proof. Yet, the likes of Kering and Burberry have faced some serious economic headwinds thanks to high inflation and the cost of living crisis. Unsurprisingly, many aspirational shoppers are now feeling the pinch on their wallets, giving a boost to platforms selling pre-owned luxury. Vestiaire reported 7% growth in the group’s high-end sales last year, in contrast to sluggish sales across much of luxury. Once seen as a niche segment, Bain & Co valued the high-end secondhand market at €43 billion ($46.5 billion) in 2022.
U.K.-based secondhand luxury platform Sellier offers luxury resale both online and in a bricks-and-mortar store in Knightsbridge, one of London’s most upmarket areas. It reported 25% growth in sales last year, its CEO Hanushka Toni told Fortune.
Toni says pricing on Sellier can differ—for example Hermès bags, which are notoriously hard to buy online and can require long waits, can be bought instantly through secondhand markets, but often at inflated prices.
The dynamics of luxury resale can go against the grain. Take the iconic Hermès Faubourg Birkin Bag, sold by Vestiaire for an eye-watering €158,000 ($171,000) in May 2022 (it retails at $30,000).
But for other brands where supply isn’t a constraint, the savings can be significant, ranging from 20% all the way up to 80% off the original retail price.
The green feel-good factor
Sustainability is a key factor in the rapid rise of secondhand luxury. The taboos of the past against buying preloved items have faded away, creating a new sub-category for green-conscious consumers looking for investment pieces that (at least in their eyes) don’t cost the earth.
A new generation of younger of shoppers are being lured in, concerned by the environmental footprint of fast fashion—the third most polluting supply chain in the world. Reports show that over half of pre-owned goods sold on resale platforms have hardly been worn.
Their growing interest in reused clothing has fueled the explosive popularity of platforms like Depop and Vinted, which sit at the lower end of the market.
“They [Gen Zers] are motivated by the smaller environmental impact of what they’re buying,” Sellier’s Toni said. Millennials, on the other hand, think of luxury differently, she argues. They chase expensive goods for the thrill of buying and owning it.
“I don’t think Gen Z shop for sport, but millennials still do. It’s a very spoiling, selfish experience almost,” Toni said.
Gen Zers, followed by millennials, are the most active buyers and sellers of luxury resale goods, Vestiaire’s Moizant told Fortune, citing their 2022 report with BCG.
Younger fans of luxury resale are taking the segment to new highs—and it’s catching the attention of Wall Street. San Francisco-based resale platform The RealReal went public on Nasdaq in 2019, and Vestiaire has aspirations to IPO in 2025, as reported by Reuters last month.
Is secondhand about to become the default destination for aspirational luxury buyers? Probably not. But with the backlash against fast-fashion, combined with economic pressures and a renewed focus on sustainability, this is a trend the fashion world can’t ignore.
