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The Resale Gold Rush Rolls On

BoF unpacks emerging models of resale services for brands, including Reflaunt, a startup that counts Ganni’s founder among its latest investors, and Vestiaire Collective’s new ‘Brand Approved’ programme.
Reflaunt service resale
Reflaunt's resale service for COS. Courtesy.

Stephanie Crespin spent nearly a decade in the luxury resale industry, attempting to find the most sensible model for sellers, buyers and — the most critical piece today — brands.

In 2013, she founded StyleTribute.com, a luxury resale website in the Southeast Asia market. Her latest venture, however, primarily serves the brand side as a business-to-business service. Called Reflaunt, the platform allows fashion labels to help their customers sell second-hand products. Instead of building out an entire resale channel, Reflaunt takes advantage of existing resale platforms around the world such as eBay, Tradesy, Zalora and Miinto.

Since its founding in 2018, Reflaunt has worked with clients such as COS and Balenciaga. Its latest $2.7 million funding round counts Ganni founder Nicolaj Reffstrup among its investors, as well as luxury fashion distributor Madaluxe Group, which led the round announced Wednesday, February 16.

Reflaunt’s service is unique to the current landscape of resale options for brands because it defers the sell side of the equation to other platforms, rather than handling the transactions itself. For instance, when a Balenciaga customer wants to sell a pre-worn Classic City bag, she would upload photos of the product and list its condition just once through the brand’s resale service, powered by Reflaunt. Then, using its automated technology, Reflaunt lists each item on nearly two dozen resale marketplaces around the world it has partnerships with. When the item sells, both Reflaunt and the marketplace get a commission, and the customer can opt to receive the rest of her profit in either cash or shopping credit at Balenciaga. The latter option comes at a premium of 20 percent, so shoppers are incentivised to turn their sale into new purchases with the brand.

Rather than starting something from scratch, brands and retailers have a lot to win [when they] leverage the existing infrastructure of resale.

“There are tons of marketplaces out there, and there are new ones popping up every day,” Crespin, who holds the position of co-founder and chief executive at Reflaunt, told BoF. “Rather than starting something from scratch, brands and retailers have a lot to win [when they] leverage the existing infrastructure of resale.”

Crespin is contending for market share in a growingly crowded space. Just two years ago, luxury brands were largely apprehensive of resale — some even antagonistic to it. But attitudes have shifted since, and a number of brands are rolling out their own approaches to resale. Earlier this week, resale platform Vestiaire Collective unveiled a “Brand Approved” programme with a debut partnership with Alexander McQueen. Later this year, workwear label M.M.LaFleur will launch its own resale marketplace built by Archive, another start-up that helps brands create their own resale channel in the form of a peer-to-peer marketplace.

“We are fundamentally at a point where sustainability and the second-hand economy has gained mass acceptance,” said Rachel Reavley, the former executive director of British Vogue and current board member of Hewi, a UK-based luxury resale website that works with Reflaunt. “Until recently it was hard for brands to know how to operate within this space… But the question now has become, ‘Why wouldn’t you?’ The floodgates to brands have opened.”

Now, it’s less a question of whether to get into resale at all and more how to go about it. And for brands that do want to, there are plenty of options. One popular iteration is the partnership with an established luxury reseller, akin to Alexander McQueen’s new collaboration with Vestiaire Collective, or Gucci’s similar arrangement with The RealReal, announced last October. Brands can also build an in-house operation on their own, as Mark Cross did in 2019, or through a white-label service like Trove, which is behind Levi’s and Patagonia’s resale capabilities and has been the dominant player in the American B2B resale space. Newer platforms are growing: Archive is currently finalising its own fundraising round, while other smaller multi-brand resale sites like Hewi and Tradesy said they’ve been in conversation with brands too.

The floodgates to brands have opened.

Some external platforms provide an opportunity to outsource the logistical heavy lifting, creating a much less capital-intensive solution than a brand building out its own e-commerce resale channel. Initial setup on Reflaunt is $10,000, plus a five percent commission on each sale, which would be baked into each product’s listing price, which Crespin says is less expensive than competitors. When a brand works with Trove, for example, it pays for not only the distribution capabilities for collecting, sorting and listing each preowned product but also the shipping and handling to the seller.

Archive too touts an affordable solution, eliminating the inventory factor entirely for the brand. The startup specialises in building a marketplace for a brand’s shoppers, who buy and sell products from one another without the brand ever having to deal with those items itself.

“It also means they can create a community around it,” Archive co-founder Emily Gittins told BoF in an interview on February 5. “We bring the seller onto the platform, they can have a direct relationship with the person buying the product.”

The growing brand pursuit of resale options has boosted these services, as Reflaunt’s funding round shows. In addition to MadaLuxe and Ganni’s Reffstrup, its new investors include former Jimmy Choo chief executive and Coty senior advisor Pierre Denis, as well as the Textile Innovation Fund. Investors from Reflaunt’s seed funding include Hong Kong-based incubator The Mills Fabrica and Balenciaga chief executive Cédric Charbit. Kering was also an early investor through its collaboration with the nonprofit organisation Fashion for Good.

“We’re seeing a pretty monumental shift in terms of giving control [of resale] to brands and retailers,” said Adam Freede, cofounder of MadaLuxe Group. “If over 20 percent of people’s closets are expected to be pre-owned products in the next few years… why not control that experience and keep your client engaged?”

Customer loyalty is the driving force behind many brands venturing into resale. Alexander McQueen’s partnership with Vestiaire Collective, for example, begins with outreach to a select group of its shoppers first, inviting them to sell their preowned products made by the label. Alexander McQueen would then authenticate the products and offer store credit to the seller. This creates a circular effect, encouraging the brand’s most active shoppers to sell their previous purchases in order to buy new products at retail.

“For the brand, Reflaunt is really a loyalty tool. It’s a retention tool,” Crespin said. “Whereas before, the customers of Balenciaga, when they buy an item and they resell it on another marketplace, the brand wouldn’t know how it’s resold, they don’t capture any data on that… Here, you have control of the customer journey beyond that first purchase.”

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The Future of Fashion Resale Report — BoF Insights

BoF’s definitive guide to fashion resale, covering the evolution of the market, its growth and upside, consumer behaviours and recommendations for crafting a data-driven resale strategy. To explore the full report click here.

The Future of Fashion Resale is the first in-depth analysis to be published by the BoF Insights Lab, a new data and analysis unit at The Business of Fashion providing business leaders with proprietary and data-driven research to navigate the fast-changing global fashion industry.

Related Articles:

For Brands, Is Resale Actually Worth It?

The Future of Resale: 5 Key Questions



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