Testament to the power of second-hand fashion, Vestiaire Collective – the leading global platform for desirable second-hand fashion – has raised €178 million in new financing, backed by global French luxury group Kering and US investment firm Tiger Global Management.
Following a strong year that saw the platform’s transaction volume grow more than 100% year-on-year, this financing round grants Vestiaire Collective unicorn status and ideally positions it for its next cycle of accelerated growth.
The pre-owned fashion sector has experienced rapid growth over the last three years with a further acceleration during the pandemic. This has been predominantly driven by younger consumers’ increased focus on sustainability and a growing trend for social shopping and online communities.
The amount of second-hand pieces in people’s closets is predicted to grow from 21% in 2021 to 27% in 2023 with the value of the second-hand sector forecasted to be worth over $60 billion by 2025.
This is backed up by research in the latest Luxury Sector Report from RetailX, which points to second-hand and recommerce as being two of the key growth drivers for the luxury industry as it looks to claw back revenues lost during the pandemic.
According to RetailX’s research, Covid caused luxury to shrink by 23% back to €217bn in total value (estimated) in 2020, taking it back to 2014 levels. Forecasts predict that it is set to take at least two to three years to recover to 2019 levels. And recommerce is going to play a big part in that recovery, RetailX analysts predict.
Maximilian Bittner, Vestiaire Collective’s CEO comments: “This latest round of investment confirms the incredible trajectory of Vestiaire Collective, founded during the 2008 crisis, the model has clearly demonstrated its ability to continue to thrive during challenging conditions. 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.”
By investing in Vestiaire Collective and by being represented at the Vestiaire Collective Board of Directors, global Luxury Group Kering illustrates its pioneering strategy, supporting innovative business models, embracing new market trends and exploring new services to fashion and luxury customers.
François-Henri Pinault, Chairman and CEO of Kering, says: “Pre-owned luxury is now a real and deeply rooted trend, especially among younger customers. Rather than ignoring it, our wish is to seize this opportunity to enhance the value we offer our customers and influence the future of our industry towards more innovative and more sustainable practices. This fits naturally with our entrepreneurial spirit, our pioneering sustainability strategy, and our modern vision of Luxury.”