Let's Talk Resale

There are high expectations for resale as pointed out by The Guardian. Next-generation customers will seek out pre-owned items that will allow the fashion industry to automatically transform a 100+ year-old linear model into a circular model. This will not happen in a straight path, nor will it happen overnight. Today, we live in the wild west, where it’s hard to distinguish the positive forward momentum from the PR plays.The Fast Company article, ‘We buy too many clothes. Can fashion’s secondhand boom change that?’ really brings this point home. The piece starts by asking the question, despite all the resale news, “why the boom in resale isn’t putting a dent in new clothing sales.” This would be like asking, despite all the eCommerce websites in 2002, why hasn’t commerce changed? eCommerce has changed commerce, and resale will change new clothing production, but business model change on this scale takes time.What is more relevant is how brands are approaching the change. Fast Company spoke with Patagonia’s @Asha Agrawal and Madewell’s @Liz Hershfield. Agrawal points out that Patagonia must ensure that its resale platform makes money because this will allow the company to reduce the number of new products it produces while remaining a thriving business. “[Worn Wear is] already a profitable business for us. So now, it’s just about scaling this business proposition, which will allow us to cut back on our net new production.”In contrast, Fast Company points out that most resale platforms don’t generate revenue for brands, including ThredUp and Recurate, which helped launch resale sites for Mara Hoffman, Steve Madden, and Outerknown. Madewell’s Hershfield states, “We weren’t looking at profitability, but we want to break even financially. We do this to ensure we’re meeting our sustainability goals.”Madewell’s Forever (their resale partnership with ThredUP) is indeed good in many ways, including keeping items in use and driving customer expectations for resale. But because Madewell doesn’t have a business model to make money on selling pre-owned items, Madewell isn’t set up to shift its business away from a linear model. This and many other brand resale programs work in a philanthropy model rather than a business model change.The importance of a profitable business model extends beyond sustainability as more brand items are sold everywhere. EXPRESS Pre Loved, powered by LXR, quietly added 150+ luxury products to its online storefront, including Gucci, Chanel, and Louis Vuitton. EXPRESS makes it easy for their customers to shop across new and pre-owned as part of their marketplace program, including shared cart, which only 25% of brands offer today. All of this works for EXPRESS but not for the brands they now sell. The obvious risk here is that brands who never choose to sell to EXPRESS have zero control on how their items are priced, merchandise, or authenticated.Chloe made news this week by announcing it would digitally label all pieces by 2025, starting with a 20-piece capsule collection this year. As WWD reports, this part isn’t new news, as many brands do this today across their full range of products. This is an essential strategy for the authenticity and future value of their products.What was more interesting, was the splashy headlines such as Vogues, Chloé launches ‘instant resale’ using digital IDs on Vestiaire Collective. This is a great headline, as it speaks to the potential brands have to monetize the total value of their items. While details of the program are scarce, Vestiaire Collective may be offering immediate payout on these items rather than requiring a buyer. In this case, Vestiaire would take on the risk of the item's condition, pricing, and selling. Given this is a 1-year pilot for a capsule collection of 20 items first available in early April, we are likely talking about a handful of items ever being bought and sold in this way.Digital product IDs are an excellent move for brands. While this is a demonstration project, Chloe’s direction to digitize all items by 2025 makes sense. Digital IDs have tremendous potential for brands to authenticate items and own the total value of their items. Digital IDs don’t make a resale program. Brands still need to own their brand, and their customers via brand resale. Digital IDs will make that easier.The So WhatTo create more sustainable models brands need to make money selling their pre-owned items. Otherwise brand resale programs will never shift their business away from linear to circular models.Digital IDs are the future but don’t change the reality that brands should not depend on anyone else to own their digital authentication keys and the resale models built on those digital IDs.

The secondhand luxury goods market grew 28% in 2022 to reach $45.21 billion, according to Bain & Company and Fondazione Altagamma. This is 1.3X higher than the growth rate for new luxury goods. For a related growth stat, eBay shared they saw a 24 percent increase in circular fashion businesses joining their site last year, and searches for pre-loved clothing on eBay UK have skyrocketed 1600 percent since last summer. This is likely why eBay recently participated in the $9 million capital raise round for Cudoni, a luxury resale platform based in London.Kirsty Keoghan, eBay UK’s global fashion GM, shared her views on the two drivers of the growth in the City A.M. “The first is related to consumers’ growing awareness of their environmental footprint, and the second is related to their expectation of high-quality products at a great value, which is more important than ever as we grapple with the cost-of-living crisis.”This week Canada Goose launched its branded resale program, Generations, powered by Trove’s Recommerce Operating System. More than a decade ago, when I discussed branded resale with retailers, brand execs, and VCs, Canada Goose was a go-to example of a brand that would massively benefit from its heritage and category –so kudos to the team. The resale program has all the elements we’ve expected these days, with a few notable callouts, such as combining a vintage section with periodic drops and an ‘always on’ ability to shop ‘certified’ Canada Goose.Just Style reported on recent findings by EURIC, the confederation representing European recycling industries at the EU level. The study found a “massive” 3kg of CO2 saved for each reused piece of clothing, equating to a 70X lower footprint for secondhand fashion.The industry needs to recognize the importance of secondhand as the new business model challenges the existing make-and-sell models. But awareness and change are too important to stay in the background, especially with social influencers. The South China Morning Post reported influencer Masego Morgan was shocked when a fast fashion giant offered her $1,000 for a single social media post to promote its brand. Sustainable fashion influencer Dr Brett Staniland provided close to $5,500 for a post. Both are fighting back against these fast fashion models. I don’t believe this is the core reason for Shein’s recent headwinds, as reported in BoF. Still, it's a headwind nonetheless, and that all adds up for both customers and investors–especially for investors with reputational risks to consider.So what does all this mean for brands? In an article titled, Inside fashion brands’ new integration of resale and retail, Glossy shared the many reasons brands are launching their resale channels, including customer acquisition, loyalty, and sustainability. The article highlighted a range of commercial success for brands in resale: with brands such as M.M.LaFleur and Peak Design sharing new customer acquisition and loyalty business benefits. In contrast, others appeared to be loss leaders for sustainability reasons. Karin Dillie, VP of partnerships at Recurate, shared, “We predict that it’s not just going to be the Patagonias of the world that are investing heavily in this in the future.”I love that, so long as these investments are against viable resale programs for the business. As the article points out, there is a wide range today. I'm concerned about brands rationalizing or hiding poor business programs behind sustainability. This is bad for the brand and rarely does much for sustainability. For quality brands, this is about understanding your customer and sound program design.The South China Morning Post ran a story on rental, ‘Renting clothes? No thanks, it’s too expensive and not as green as buying second-hand. Aside from the overly aggressive headline, there are some cases where rental makes sense. We must start with the customer, potential economics, and environmental math, not simply launching rental or resale as a cookie-cutter program.Ultimately customers will continue to move toward value, and getting more use out of what we make is a prominent area of growth–both for enjoying better brands for less and less wasteful production models urgently needed for sustainability. But just like fashion, one size doesn’t fit all. Over the long run, the brands that align themselves with innovative resale programs will win.Why It Matters:Secondhand continues as the fastest-growing channel in retail, so those not offering these options to customers are simply losing market share.The design of resale programs matters to create the correct business value. Without business value, these programs will struggle to scale and reach their potential environmental benefit.

J. Crew launched its resale program, J Crew Always, with Thredup’s Resale as a Service (RaaS) last week, well-timed to be announced at NRF’s Big Show. Given the existing Madewell program with ThredUP, it wasn’t surprising to see J Crew enter resale in this way.According to WWD, “The J. Crew items already listed on ThredUp are not part of the J. Crew Always initiative.” Historically it has been a marketplace limitation to pull in thousands of items already listed on the branded resale site, often degrading the brand given the wide range of item conditions. This program seems to be a significant step forward to designate only some of the items as fitting branded resale.Second, segmented inventory allows J Crew to sell in select stores. According to a Retail Dive article, “the 40-year-old brand is leveraging its longevity with ‘J. Crew Vintage,’ a curated collection for men and women to be sold at select stores, including two in New York City.” It is a smart move for J Crew as it provides a reason to visit a physical store and leverages store traffic to create awareness of the online program.Similarly, Depop launched a collection in combination with Tommy Hilfiger. No bells and whistles to call out but worth noting as more brands are looking to capitalize on the shift to secondhand. RaaS programs have come a long way in recent years with more customizable storefronts and now more segmented inventory. However, brands need to remember even with these steps, and it is far from a branded experience. In the end, J Crew Always will operate on the same technology as ThredUP, constrained on brand choices such as product title, description, search, and markdowns which optimizes ThredUP, not the J Crew brand. Additionally, at some point, all brands will need to own their customers and keep a competitor from sharing sales data for a significant and growing channel.The New York Times started their piece, Rolex Now Has a Resale Program. The Watch World Quakes, “There is a saying in the high-end watch trade that there are only two kinds of watchmakers: Rolex and everyone else.” It’s an excellent article for anyone in the resale space. Rolex is not only instructive for the watch category, but the high-end watch category is instructive for fashion, luxury handbags, ready-to-wear, outdoor gear, and footwear companies. There are learnings here for how to view items, even if many are aspirational.Rolex Certified Pre-Owned (CPO) validates the secondhand market for many customers and undoubtedly increases the value of every new Rolex sold–as a product becomes an asset. By enforcing CPO standards, Rolex will also drive up the secondary price of these timepieces, furthering the quality of the brand–i.e., CPO Rolex will sell at a premium, which is a good thing for Rolex. Finally, HBR published an article, How Sustainability Efforts Fall Apart; an excellent read for anyone in a larger brand organization working on resale. I listened this morning as Max Bittner, CEO of Vestiaire Collective, answered a question about the metrics his investors watch as a B Corp. Max’s straight-faced answer was GMV, Revenue, and Net Profit. The audience gasped as he didn’t mention CO2, Water, etc. I agree with Max’s answer and would have likely added that resale models achieving business value is the way we will achieve more sustainable, circular models. Brands must make similar or even more money on circular models if we want them to take hold and ultimately provide more sustainable solutions to the fashion industry.The So WhatEven as marketplace platforms provide more options for brands, they ultimately are incentivized to build their customer base rather than the brand.Rolex’s move into CPO can be instructive for others in the high-end watch industry as other industries, including fashion, luxury, outdoor, and footwear.

Rent the Runway’s deal with Amazon is a five-alarm fire for brands such as Rag & Bone and Tory Burch. RTR sells pre-owned branded fashion and its own branded pieces on Amazon at significant discounts. RTR started with selling via Thredup the Sacks Off Fifth and now Amazon. Their stock was rewarded, but this is short term, but it’s hard not to see the desperation with long-term concerns for the company.@Sucharita Kodali, principal analyst at Forrester, said in a Sourcing Journal piece the new relationship suggests RTR isn’t “operating from a position of strength” and has “basically thrown in the towel.” She compared the deal to the “end game in chess.” “You’re about to lose… so you’re giving up your rook as a last-ditch effort to delay…the end of the game.” I share these quotes because Sucharita nailed them.This makes fantastic sense for Amazon, which now sells $7,150 Chanel handbags and $12,500 Rolex watches to their customers, even though Chanel or Rolex would never directly choose to sell on Amazon. They continue to provide more brands and value to their customers. With more customer traffic, they gain negotiating power over others such as RTR and What Goes Around Comes Around (WGACA), who suppliers the Chanel handbags and $545 Hermès scarves.So why did RTR do the deal? As a recent public company, they are fighting to prove they can build a profitable business that captures the customer shift from ownership to access. And there is a massive shift taking place, but it needs to be faster to satisfy public investor expectations. We will see whether these moves toward resale will distract RTR from its core rental platform or provide the life support that the business needs for customers to catch up. I sadly expect it will be the first.And what does this mean for brands who now find themselves with more items on Amazon? More headwind. As if this economic market and the changing customer weren’t challenging enough, brands increasingly compete with discounted items as others profit and degrade their hard-earned brand equity. This latest move is another example of how brands must control their destiny–offering resale models directly and working with channel partners with aligned interests.In other news, this past week, we went from 120 resale programs to 121, as we can add YETI to the list of brands with owned resale channels with the launch of YETI RESCUES. YETI is the latest in a series of impressive launches for Arrive, including Burton and Eddie Bauer. While the assortment appears limited to ‘open box’ items, the online storefront is clean, on-brand, and easy to shop. While it’s a fine starting point, I expect this to be a jumping-off point for YETI and expect them to expand assortment and ideally trade in over the coming months.On the marketplace front, consolidation continues as South Korean internet player Naver invested $80.7M to become the largest stakeholder in Wallapop, a mobile-based European platform for buying and selling second-hand products. This follows the acquisition of Poshmark last year as Naver establishes a strong global P2P portfolio that connects the markets in North America, Europe, Japan and Korea. Given these platforms are building customer brand and loyalty, this is a play for more global market coverage with the ability to leverage P2P technology at a greater scale.Additionally, Sellier Knightsbridge has acquired the luxury resale platform Worn, growing its business by a reported 25%. Both acquisitions speak to the maturing marketplace space and the need for scale. It’s only mid-January! and I expect to see far more consolidation in the coming months.While luxury marketplaces consolidate, more luxury players are predicted to enter with direct offerings, as covered in Retail Brew. The article summarized it’s 2023 predictions as another massive growth year for resale; however, profits will be elusive. While I don’t disagree, I see this year far more about scale for brands. For brands to scale any line of business as they fight for their fair share of the growing market, they must live up to the customer experience and make money. This is where profit becomes critical to scaling resale.The So WhatBrands need to control their destiny in the secondhand market, so their items don’t end up being sold in channels that devalue the brand.What’s good for Amazon may not be good for your brand

Don't Buy This Jacket - A Story with Former Patagonia’s Nellie Cohen and Trove’s Founder Andy RubenThe birth and evolution of Patagonia’s Worn Wear is a story of confronting the hard truths about our linear business models that overproduction is ultimately unsustainable. It is a story of innovation through iteration baked with intentionality, failing forward and trying again. As Nellie and Andy recount these early years, the audience will take away more general value that can be applied to their business, including:Confront the hard questions. Our current linear fashion model puts us toward ecological bankruptcy, which requires system change. The work required here is not straightforward or quick. It involves confronting uncomfortable truths, risk, and experimentation. Bring in others.Circular models require business model change. Checking a box that you “do resale” is just that -- checking a box. Transformational business models allow a brand or business to grow in a new manner that doesn’t require production growth in emissions. These require a north star and intention at the highest levels of a company.Business model innovation aligns with the core brand. Innovation needs to be tied to the brand ethosLearn more about Trove and Anthesis. Connect with Andy Ruben and Nellie Cohen.

It’s been a week of 2023 prediction soup. Nearly all the prediction lists included Resale–some predictions driven by younger customer preferences, some by value in difficult economic times, and some for sustainability-oriented shoppers. Learn how these predictions can be acted on for your brand in this week's Resale Edit.

Happy New Year, and Welcome to what is sure to be a dynamic 2023 for Resale.Let’s start with Glossy’s article, The state of resale in 2023: Competition, consolidation and a push for profitability. The piece assessed players from The RealReal to Treet and summarized with “twin challenges of an overcrowded market and the growing expectation for profitability will be difficult to overcome.”A critical element is missing in this assessment. The distinction between The RealReal, which is a third-party marketplace building its brand and customer base, and Treet a service provider aimed at supporting brands who are adding resale to their existing business.Third-party marketplaces, such as The RealReal, Thredup, Poshmark (now part of South Korean internet conglomerate Naver Corp.), and Vestiaire Collective, are retailers who focus on their brand and build a profitable customer base. They exist in a reasonably mature market, and most players are now public. Vestiaire is the exception, who just raised $80B in debt as they work toward profitability. While there is room for a few players in the space, it is overcrowded today. Given the lack of profitability and the economic climate, valuations are lowered, and more consolidation is to be expected. In this part of the industry, Glossy is right on the money.Service providers, such as Trove, Recurate, Archive, Reflaunt, and Treet, are not building a customer-facing brand or a loyal customer base. They are service providers who support brands whose items are being resold on marketplaces such as The RealReal the Thredup. This part of the industry is far less mature and is poised for incredible innovation and growth as more brands enter Resale and work to scale their offerings.Scale will be the test for the service providers as the brands mature and look for more scale, but it’s likely too early for consolidation here. That will be in 2024 and beyond.The second Glossy article, What to expect from fashion rental in 2023, details the up and down year for rental in 2022, including new brand launches into rental such as Marks and Spencer, John Lewis, and MatchesFashion all launched rental while both Ann Taylor and Banana Republic quietly shut down their rental programs.Rental is a new customer behavior, and brands must determine if rental is right for their brand. Customers aren’t going to want separate rental programs for every brand and need in their wardrobe. Hence these programs will likely make sense for multi-brand retailers such as Rent the Runway, Selfridges, Nordstrom, or REI and possibly for specific use cases such as Burton’s rental kit, including snowboard, boots, bindings, and outerwear for hitting the ski slopes. The Key TakeawaysIf your brand is exploring different circular models such as rental, think about the value for your customers over the long term. Brands will learn the most as they enter the space in the most customer-centric way for their products.Brands need to be aware of who they ‘partner’ with as customers look for more preowned options. Third-Party Marketplaces, such as ThredUP need to build their brand and loyal customer base and are not aligned to do the same for a brand.Subscribe to The Resale Edit Newsletter Here: https://www.linkedin.com/newsletters/6966761821013753856/

5 Resale Predictions for 2023 As the news slows down for the Holidays and New Year, we’d love to share our resale predictions for 2023. Let’s start with how the end of this year. 2022 will be the year Branded Resale became table stakes. We went from 31 to 120+ brands with dedicated resale programs. There is no going back.Brands didn’t start the shift, customers did as pioneers such as The RealReal, Poshmark, Rent the Runway, and ThredUP made it easier than ever to shop secondhand. Brands took it from there. Eileen Fisher’s ‘Green Eileen’ was the first in 2009 but still positioned as philanthropic. Patagonia x Trove launched Worn Wear in 2016 as the first branded resale program, quickly followed by Eileen Fisher x Trove and REI x Trove later that year. ThredUP launched RaaS in 2019. Reflaunt was founded in 2017, Recurate in 2020, Archive in 2021, and most recently Treet all of whom make it easier than ever for brands to launch branded programs.The customer shift continues to make resale the fastest-growing retail channel and the more brands with resale programs, the more customers expect brands to have resale channels. There is no going back. So what’s next? 5 Predictions for 2023 Brands with newly launched resale programs move to build resale businesses. This requires a path to scale and profitability and will ultimately require logistics. 2023 will start to really separate the headlines from the businesses moving hundreds of thousands of single SKU items to new homes.Brands further integrate the customer journey more fully realizing the power of resale and trade-in. We saw the start of this in 2022 with integrated carts, order history, store trade-in, and returns, and that trend will accelerate.Continued consolidation of third-party marketplaces. There is room for a few third-party marketplaces, which are really simply retailers but fewer than the number today. We saw the start of this in 2022 with Tradsey, Poshmark, and Grailed but there is more to come as these marketplaces work to both scale and prove long-term business viability.New innovation models that mix historically separate ideas such as resale, rental, and discovery. These lines are blurring and there will be more companies starting to pioneer on the backs of what brands are now doing.Luxury’s wake-up call. Luxury will realize it’s time to act in order to protect their brand from being sold in channels they can’t control. Retail is a large marketplace and as Amazon, Walmart, Saks Off 5th, and more start selling Gucci and Louis Vuitton, there is a risk to the luxury brands themselves–in both brand equity and authenticity.

As Sourcing Journal writes, Money Keeps Flowing Into Secondhand Shopping. Yes, and this week we will cover Vestiaire’s $80M in a credit line and Beni’s raise of $4M. There is a lot of talk about how secondhand is accelerated by the economy or this or that. The reality is, shopping secondhand allows us to get nicer things for less money. Value is about as basic as it gets for what appeals to customers and secondhand delivers this in a fundamentally new way.Max Bittner, CEO of Vestiaire is good at raising money. Vestiaire Collective has signed a €75 million sustainability-linked revolving credit facility (RCF) from Crédit Agricole CIB, Société Générale, HSBC Continental Europe, Bank of America, and Goldman Sachs. Vestiaire is private and it’s unclear how great the financial losses are in building the platform but I am confident this cash was needed as I expect the interest rate isn’t cheap these days.But what’s interesting about this to me is the linkage between finance and GHG emissions captured in the debt. The debt instrument has “potential interest rate discounts based on performance against key ESG targets, including the reduction of its GHG emissions,” explains Vestiaire Collective in a press release. Of course, there are questions about how such reductions are measured but honestly, for now, the bigger point is they are being structured this way at all–which is exciting both in the recognition that secondhand is critical for fashion emissions and these banks find it important to finance GHG reductions.In other financing news, Beni, the web browser extension for secondhand shopping, announced the close of its seed round of $4 million led by Buoyant Ventures bringing the total raised to $5M. Congratulations to Beni CEO Sarah Pinner. Beni is an innovative way to make it easier to shop secondhand now across more than 30 resale sites and I expect just one of many we will see in the coming year.Goodwill’s secondhand site, GoodwillFinds has reached nearly 200,000 available items and CEO Matthew Kaness believes they will catalog over a million items by the end of the year. In earlier posts, I questioned if Goodwill would invest in the technology necessary to sufficiently operate an eCommerce business and it looks like so far the answer is yes. Goodwill has a significant physical presence and bringing these items online will be one more way plus in propelling the industry forward. Right on.The New York Times in a piece titled, Cheap Meets Eco-Chic on the Ski Slopes, discusses the shift from traditional ski swaps to online-enabled secondhand shopping. Included in this was Burton’s formal entry into resale with an online rental program giving customers the option to rent a kit — a snowboard, boots, bindings, and outerwear — that can be shipped anywhere in the continental U.S. The platform is supported by Arrive who continues to make great progress in supporting brands, especially in the rental space.And finally, the resale launch of the Plus-size brand Torrid with ThredUP. The program is in line with Thredup’s Resale-As-A-Service (RAAS) but it is exciting to see more inclusive brands in the resale space and worth a call out.Key TakeawaysSustainability efforts must go beyond PR and are increasingly important to financing and interest rates for brands that can demonstrate GHG reductions.Brands should stay close to how these innovations evolve with new models such as Beni’s browser plug-in and Burton’s rental kits emerging and the new opportunities these create for them in the resale space.

Join host Samantha Dersarkissian and Co-founder and CEO of Beni, Sarah Pinner, as they dive into consumer sentiment for gifting resale and how brands can tap into resale to acquire new customers and increase loyalty with existing customers. To learn more about Beni please visit joinbeni.comIf your brand wants to launch a profitable and scalable trade-in and resale program, learn more about Trove at Trove.com

There Will be a ‘Before and After’ of the Recent Rolex Pre-Certified AnnouncementRolex continued to make news this week as the industry digests the implications of their pre-certified program. Charles Gorra of Rebag was quoted in PYMTS saying “It’s incredible. I think [Rolex entering the market] is the biggest news that I’ve heard in the last decade in terms of the resale world. I think there will be a ‘before and after’ with that news. It changes everything,” he added, saying that it further legitimizes the resale industry.According to Glossy, Rolex makes up roughly 30% of the luxury watch market and a far larger share of the secondhand market, estimated to be between 40-50% with some 30 million Rolexes circulating today. Regardless of changes in the commerce landscape, the best brands are designing and creating worthwhile items that maintain brand relevance with culture, this increasingly includes where and how existing items reflect on the brand. Rolex’s own pre-certified program is a watershed example for the luxury market. This a step all brands will ultimately take as more of their brand items live on in the secondary market.In other news, Rebag launched a wallet feature that rewards sellers with 1% interest for leaving their payout in their ‘Wallet’. Rebag has always been on the edge of new customer-centric features most notably the Infinity Program which allows buyers to trade items back in for known amounts within given time periods (aka, rental without the need for a contract). In a similar vein, these new features drive loyalty on the supply side. As an example, a client who sells an item leaves their payout in their Wallet for the full 12 months, then puts the money toward a Rebag purchase will see their spending power increase to 24 percent. Today’s $5,000 offer, for example, would be worth $6,200 at Rebag in 12 months.I am not sure if this will make a material difference in items sold as touted, but it is a nod toward supply-side loyalty. As BCG published findings this week that sellers are most motivated by time savings and making room in their closets. Recovering the residual value of their item was an additional motivation. But what I like about the Rebag Wallet is the long-game incentive to build loyalty at the supply level. Ultimately for the best brands, all markets will be supply-constrained and platforms such as The Real Real (TRR) and Rebag as well as brands such as REI are wise to begin building loyalty for those customers who trade in valuable items.Finally, as covered in BoF and WWD, peer-to-peer player, Archive raised $15M last week. Congratulations to Ryan and Emily and the Archive team. While funding isn’t everything, building capabilities for brands is an investment and this puts Archive in step with peer-to-peer provider Recurate in terms of the ability to invest in needed technology. The increased competitive environment with a number of peer-to-peer platforms makes it easier than ever for brands to move forward with brand resale platforms. An incredible step for the resale industry. Longer term the test for these platforms will be scale, which I expect will require reverse logistics operations and far more investment, but the more providers and the more brands able to offer branded resale, the better.Key TakeawaysProtect your brand. All great brands must maintain brand relevance with ever-evolving culture, which increasingly includes where and how past items reflect on the brand. Rolex’s launch of its pre-certified program is a great example of brands taking control.Scale will be the name of the resale game.There are more options than ever for brands to enter brand-owned resale. Brands who launch programs will over time need to assure they can achieve scale which will include reverse logistics and operations.Until Next Week,Andy Ruben | Founder & Exec Chair of TroveWeek of December 13thCan Rolex’s new resale program and booming secondhand market coexist?GlossyOn December 2, luxury watch giant Rolex made an announcement heard throughout the watch world: It will officially begin selling secondhand Rolex watches certified by the brand through its 1,816 authorized dealers. It’s starting with six retailers immediately, and more will be added throughout 2023.Rebag Debuts Wallet Feature to Help Break Resale Supply BottleneckPYMNTSIn announcing its new Wallet feature Wednesday (Dec. 7), the reCommerce platform is hoping the incentivized savings feature will entice more sellers into the market, Rebag founder and CEO Charles Gorra told PYMNTS, while also encouraging consumers to embrace an investor-like mentality as the 8-year-old business — and the industry — grows.eBay UK Expands Secondhand Clothing Options Through New PartnershipRetail TouchpointseBay has launched a new UK partnership with clothing resale, sanitization, and repair platform ACS to expand the online marketplace’s secondhand offering and help reduce waste in the fashion industry. The partnership aims to help more brands create and scale resale offerings while adding more secondhand options to eBay UK’s platform.Resale Start-up Archive Secures $15 Million in FundingWWDWith this new influx of capital, Archive’s total funding is up to $24 million following a raise earlier this year in January. Today, Archive powers resale experiences spanning peer-to-peer, brand-managed, vintage marketplace and in-store resale models counting 32 brands — among them M.M. LaFleur, Filippa K, Dagne Dover, and Oscar de la Renta — in its resale camp.Resale Platform Archive Raises $15 Million Series A RoundBofFCreating tailored resale programs for each of its brand partners, Archive is one of several startups that enable brands to offer consumers a secondhand option. One of the Archive’s competitors, Trove, which counts Lululemon, Levi’s, and Patagonia as clients, raised $77.5 million dollars last autumn. Unlike Trove, Archive does not handle logistics on behalf of its brand partners. The bulk of its operation involves building peer-to-peer marketplaces where users can sell and purchase pre-owned pieces from one another. In recent months, Archive began to offer a managed resale model too.The death of DepopThe Michigan DailyThe popularity of thrifting, especially among young women, often drew the ire of video essayists and journals alike. According to “Gentrification in Thrifting,” published in UCLA’s FEM newsmagazine, “Affluent shoppers often purchase excess inventory they found at low prices in thrift stores and resell it on websites such as Depop or Poshmark at substantially higher rates.” Due to this purchasing of clothing in bulk, blame often falls on the young women purchasing and selling these clothes online for the rise in prices and scarcity of clothing in stores like Goodwill or Salvation Army.Driven by Gen-Z, Preowned Clothing is Expected to Make Up 27% of the Average Resale Buyer’s Closet By 2023Business ReviewThe secondhand market is already worth 3% to 5% of the overall apparel, footwear, and accessories sector and could grow to as much as 40%. While resale products make up approximately one-quarter of secondhand products buyers’ closets, they are expected to comprise 27% of closets in 2023. Gen-Z consumers are the most apt to both buy (31%) and sell (44%) secondhand items, with millennials close behind.Has Secondhand Gifting Finally Become Acceptable This Christmas?Huffington PostFor a lot of people, the idea of buying our friends and family a gift from a charity shop feels odd. Will I offend someone if I buy them a second-hand gift? Will the gift be in good condition? What will I do if they want to return it? But, 38% of people said they had gifted someone a secondhand item over the past 12 months, according to a survey from Vinted. Another 65% of people said they would consider gifting someone a secondhand item in the next 12 months.

We are in a tough economic environment. Increased costs of new items make resale more attractive by comparison. Yet third-party marketplaces such as ThredUP and The Real Real (TRR) have reduced their growth projections. Let us look at the variety of factors at play: Less discretionary income, hence less shopping dollars in playRetailers are heavy on inventory across the boardDeeper discounts on new merchandiseA KFYR News piece from last week highlighted increased traffic to thrift stores. Mercari shared, 62% of parents bought secondhand items for their children in the past year of which a quarter of those purchases were motivated by inflation. Similarly, WWD wrote that StockX experienced a record sales day on Black Friday this year with the marketplace seeing one trade every second. StockX stated it had roughly 10 million visitors to its website and app this weekend and customers from nearly 150 countries. That’s staggering growth.At the same time, Retail Wire published in third-quarter announcements, major off-pricers, TJ Maxx and Ross Stores, raised their full-year outlooks while expressing confidence in their ability to reposition their mix for an increasingly promotional environment. This confidence and guidance provide a clear data point that retailers are heavy on inventory.So we would expect this would be a boon for apparel resale marketplaces. However, ThredUP and TRR both reduced their outlook for the year. Why? The relative price benefits of secondhand are being overshadowed by the deep discounting given inventory positions this Holiday. While this is a near-term challenge for 3rd party marketplaces, it is an opportunity for brands to leverage secondhand as an incredibly relevant offer in the market today.Brands are increasingly taking advantage of secondhand opportunities. Rolex announced the launch of an official certified pre-owned program. The program is rolling out in a select set of markets and is highly dependent on official Rolex retailers. These retailers will assure the ROLEX movement of each timepiece and then deem the items Rolex Pre-Certified. Only the official Rolex network is able to provide these guarantees. The dependence on the Rolex network is both a strength and has limits. On the plus side involving jewelers and setting high standards is right for the brand and program launch. However, the dependence will limit the scale and adoption of the standard and I would expect the program to evolve over time.We’ve had lots of talk about economics but let's dive into sustainability. Rachel Greenley, an M.F.A. student took a seasonal warehouse job for an online superstore and described her experience in an NYT editorial. Her job is to determine — in less than two minutes — whether a garment should be resold. The editorial goes on to highlight the incompatibility between brand sustainability efforts and the growth of fast fashion. “We support a system of throwaway clothes that didn’t deserve their trip around the world or the number of hands that touched them.” A 2018 Environmental Protection Agency report estimates 66% of discarded clothes end up in landfills each year, and another 19% are incinerated.A related NYT piece highlighted the opening of a Renewcell factory and half-dozen start-ups around the world aimed at commercial textile recycling. While the scale of this new facility is laudable, they are only able to accept pure cotton textile waste, and the majority of clothes are made from synthetic blends. McKinsey estimated it would cost €6 - €7 billion to handle less than a fifth of the textile waste generated in Europe alone. And this neglects the customer change necessary to collect these items.While textile recycling is an essential part of a more sustainable future, it’s not a solution for our growth of production. We can’t recycle our way out of this. Credible sustainability programs must address new production growth. Growth from selling well-made items multiple times is an obvious retrofit.Key TakeawaysGreat time for brands to enter the secondary market with a branded resale program as these options are highly relevant in this economyBrand sustainability plans need to go beyond recycling to ultimately decouple growth from increases in net new productionUntil Next Week,Andy Ruben | Founder & Exec Chair of TroveResources:What does the promotional climate mean for off-pricers and resale?Retail WireIn third-quarter announcements, major off-pricers, TJX and Ross Stores, raised their full-year outlooks while expressing confidence in their ability to reposition their mix for an increasingly promotional environment. Apparel resale marketplace thredUP, however, reduced its outlook due to the heightened price competition from traditional retailers.INSIDE RE-SEE, THE ULTRA-LUXURY SECONDHAND RETAILER THAT WANTS TO BE THE HERMÈS OF RESALEFashionistaWith a new partnership with Alaïa and a much-talked-about old-Céline archive sale during Paris Fashion Week, Re-See is one of the industry's best-kept secondhand shopping secrets. "Luxury is a brick-by-brick approach," Bernardin of Re-See says. "And the most important thing is to have a point of view. We want to be the Chanel or Hermès of resale, and that takes time."Secondhand shopping: parents cut back on spending on kids because of inflationKFYR NewsWhen money is tight and parents sit down to work out a budget, usually the last thing to get cut is money spent on the kids. However, children’s secondhand stores are seeing a notable increase in business, and many say budgets that are stretched too thin because of inflation are the reason why. Children’s clothing thrift stores are seeing lots of growth in new customers. According to the resale platform Mercari, 62% of parents bought secondhand items for their children in the past year. 25% of those purchases were motivated by inflation.NIKE IS TOPS: Sneakerheads went all in on Cyber Weekend, according to a new report from StockXWWDThis year, StockX experienced a record sales day on Black Friday with the marketplace seeing one trade every second. StockX stated it had roughly 10 million visitors to its website and app this weekend and customers from nearly 150 countries.Will We Ever Be Able to Recycle Our Clothes Like an Aluminum Can?New York TimesA new textile recycling plant opened by the company Renewcell in the small coastal city of Sundsvall, Sweden, is so big that employees use bikes to get from one end of the production line to the other. Up until now, most clothes marketed as made from recycled materials only contained a small percentage of recycled cotton or were made from water bottles, fishing nets and old carpets. (Technology exists to recycle polyester into polyester but is prohibitively expensive and rarely used.)ROLEX LAUNCHES THE ROLEX CERTIFIED PRE-OWNED PROGRAMMENewsroomBecause they are built to last, Rolex watches often live several lives. And because they may be worn on new wrists, the Rolex Certified Pre- Owned programme now enables retailers in the brand’s official distribution network to sell second-hand models that are certified as authentic and which come with a new two-year international guarantee.Vestiaire Collective, Paco Rabanne collaboration celebrates circular fashionLuxury DailyFrench fashion brand Paco Rabanne and repurposed fashion retailer Vestiaire Collective on a new collection called Paco Rabanne x Vestiaire Collective: Long Live 1969.Shein Confusion: The Fast-Fashion Giant’s New Resale Site Doesn’t Make Buying EasyThe InformationIs Shein Exchange, the e-commerce behemoth’s foray into resold clothes, a growth engine—or just greenwashing? All I wanted from Shein Exchange was a plain black skirt. It was a simple enough desire, I thought, as I swiped around the fast-fashion giant’s newly launched resale platform. Scrolling through the offerings, I was bombarded with used neon crop tops, bedazzled pants and denim skirts—but my basic wardrobe staple was nowhere to be found.This Is the Reality of America’s Fast-Fashion AddictionThe New York TimesI’m a seasonal worker in a warehouse of an online superstore. Five days a week, I make $18.75 an hour standing at a station with yellow bins brimming with returned clothing. My job is to determine — in less than two minutes — whether a garment should be resold. Indeed, 66 percent of discarded clothes end up in landfills each year, and another 19 percent are incinerated, according to a 2018 Environmental Protection Agency report. Brands point to sustainability efforts, but fast fashion is simply incompatible with sustainability. We operate under an economic belief that growth is unlimited. Our natural resources are not.

Ahh…so it begins. The barrage of Black Friday and Cyber Monday emails and now SMS appears to be the hallmark of the Holiday season. In the 2000s national chains such as Walmart, Target, and Best Buy found a way to take advantage of this timing as a marketing moment to kick off holiday shopping–setting record sales numbers year after year by focusing deals in small time windows or "events."But times are changing. Glossy reports “Brands are saying goodbye to Black Friday,” due to a shift in customer values. Yes, Black Friday has continued to wane from its heyday but let’s not kid ourselves, the trend has more to do with shifts in the retail landscape than customer values. Black Friday is a marketing event that no longer holds the value it once did for retailers. What has changed is the growth in e-commerce and constant access to deals, making this once-limited event, less effective as a marketing event. Make no mistake, we are shopping MORE every year, regardless of changing values. 92 million tonnes of textile waste are produced globally every year, according to Punch. But very few people think about where all these textiles go.The answer: West Africa. The majority of the US and European excess textiles and unwanted clothing is “donated” to African countries and the volume of these imports is mounting to unimaginable levels as stated in Vogue. Today, less than 12% of all fashion waste is recycled with the majority being burned and buried overseas where it is sold, out of sight out of mind. This reality is getting worse with fashion waste increasing by 50% at the end of this decade.While there are no silver bullets to eliminate the real cost of overproduction, as Impakter points out this week “people purchasing brand new items for every occasion are perpetuating this system – secondhand shopping slows this cycle.” An item sold for the second time most often replaces the sale of a newly made item, hence lessening production as nobody wants to make items that don’t sell. Triple Pundit supported this trend in their coverage of Secondhand Sunday as the latest in retail holidays. In a recent Deloitte study, 48% of retail executives plan to offer resale directly to their customers. While I’m not sure if Secondhand Sunday will become the next Black Friday for retail, every brand should be looking to sell their brand items as many times as possible.So, given this, should Vestiaire ban fast fashion? This is the question Vogue raised in their article, “Should resale sites ban fast fashion? It’s complicated”. On one hand, the more items we can get additional use out of the better, and on the other hand, fast fashion resale may continue to perpetuate the model. My take… good on Vestiaire for creating a 3-year sustainability strategy, good publicity, and good economics which I respect. However, their ultimate decision won’t matter at all in the world of growing fast fashion–this part is just smart marketing.Where I really appreciate Vestiaire’s stance is in legislation. As the sustainability crisis escalates, at some point legislation will pass some "tax" on end-of-use. Brands with resale programs will be best equipped to take advantage of this new landscape; the ones yet to address this important area will fall further behind.The So What+Brands will inevitably be asked to address production growth as part of their sustainability strategy as legislation intervenes in pervasive fashion waste.+There is a real cost of fashion and there is no farm where items go on to live a happy life.Resources:Brands are saying goodbye to Black FridayGlossyBlack Friday is falling out of fashion, based on consumer values and behavior. The discounting holiday that was once consolidated into Black Friday has grown for many brands to be an event spanning at least two weeks. The discounts themselves, therefore, tend to be less compelling. What’s more, the whole idea of the holiday conflicts with the emerging conscious consumers’ values.Should resale sites ban fast fashion? It’s complicatedVogue BusinessVestiaire Collective bans fast fashion items from being sold on its peer-to-peer resale platform. Documenting a trip to Ghana, the Vestiarie team witnessed the magnitude of unwanted textiles and “donated” clothes consuming west Africa. The ban presented as a sustainability play to crack down on waste raises questions on how circular business models should handle pervasive fast fashion.What If Buying Used Clothes Was as Easy as Buying New?BloombergFinding exactly the type of clothing you want or need secondhand can be a slog. A new company called Beni aims to make the process easier by suggesting used items while a customer is shopping online for new ones. The goal, says Beni Co-Founder and Chief Executive Officer Sarah Pinner, is to make buying resale “as easy as buying new, so buying new isn’t just the default.”Secondhand Sunday is Fashion’s Latest Initiative in the Rise of ResaleTriple PunditFirst came Black Friday. Eventually Small Business Saturday, Cyber Monday and Giving Tuesday arrived. But what about the Sunday after Thanksgiving? Online marketplace Poshmark has the answer: Secondhand Sunday, a new holiday dedicated to “supporting secondhand sellers, circular fashion, and the planet.” Poshmark is calling on people to buy used instead of new on Nov. 27 and to share their finds on social media with the hashtag #SecondhandSunday. Second-hand clothes from the West pose environmental challenges in Africa – ExpertsPunchPlastic waste and oil are not the only contributors to the worrying global waste problem. Clothes are too. Several data undisputedly allude to the fact that developing countries in Africa are large importers of used clothes and face the problem of clothing waste. An international trade data organization, The Observatory of Economic Complexity, pegged Nigeria as one of the top five importers of used clothing with an annual fee of $124M. Earth.org reports that 92 million tonnes of textiles waste are produced globally, every year. This implies that a truck full of unwanted clothing ends up on landfill sites every day. As the trend of fast fashion continues, textile waste is expected to soar by 50 percent by 2030.The Pros and Cons of Vintage ShoppingImpakterVintage and consignment shops support sustainability by promoting the resale and reuse of long-lasting items instead of alternatively throwing them away. Secondhand shopping and thrifting are keys to Earth’s future. We’ve reached the point where new production is unnecessary. Our planet is riddled with goods we don’t even use. Many items are overproduced and end up in landfills as quickly as they were assembled. People purchasing brand-new items for every occasion are perpetuating this system – secondhand shopping slows this cycle.The Stretched Scope of Secondhand: Clothing and MoreImpakterThere was a time when yard sales were our main vessel of resale but luckily, technological advancements have obliterated previous limitations. The internet alone has stretched the scope of the secondhand industry. We now have the technology to sell our trash and buy another person’s treasure from the comfort of our own homes. Cell phone apps, reselling websites, and social media have increased secondhand transactions and clothing isn’t the only thing people are buying.LVMH Launches Curated Archive Platform HeristoriaWWDPARIS — LVMH Moët Hennessy Louis Vuitton has launched Heristoria, a platform of archival and historical pieces. The platform aims to find treasures within the company’s maisons and launch special sales of unique items, each paired with experiences and services. “Heristoria reflects our passion for beautiful stories. Only a group like LVMH has the capacity to bring such a diversity of iconic heritage items under one umbrella; objects that are the ongoing expression of our maisons’ know-how,” said LVMH group managing director Toni Belloni.

In an article titled, ‘Secondhand Luxury: Opportunity or Threat’ BoF raises the question: what's the right path for brands? Buyback and then resell their own goods, or route them to resale sites, which give brands a cut of sales?The growth of resale is all about brands... imagine shopping on The Real Real if none of the items were branded. Customers are shifting their behavior toward resale based on affording brands they otherwise could not access. This in turn creates both threats and opportunities for brands themselves as BoF points out.Historically, brands have been concerned about the cannibalization of new sales, a concern that a recent Boston Consulting Group (BCG) study found to be unfounded. BCG data shows that the secondary market actually stimulates sales of new luxury goods. Additionally, the study found 71% of buyers of pre-owned items tended to buy products and brands they could not afford new. This suggests that secondhand products widen the market for high-end brands and can serve as potential gateways for first-time buyers.As The Sourcing Journal piece, ‘Take-Back Programs Are Gaining Steam. Do They Actually Work?’ pointed out, not all resale programs are based on profitable business models for trade-in. Trade-in models where brands only benefit from gift cards are essentially marketing programs.There are also risks for brands that solely rely on 3rd party marketplaces to maintain brand standards and authentication. WWD’s this week covered Vestiaire Collective’s offer to work with luxury brands to learn and train authenticators to spot details on the most sought-after items. Bloomberg Law went deeper into the increased risk to brand IP and commented that such partnerships may allow brands to participate in the product authentication process, which helps to prevent brand dilution while still enjoying the benefits of participating in the circular economy.Brand IP is the ‘key to the castle’ for a brand. Brands should be wary about educating anyone beyond the obvious signs of fake products as they will lose control. As the Bloomberg article rightly points out, we will get to a point where brands will use technology to track and identify fraudulent items but we are 5+ years away. In the meanwhile, brands can be strategic about 3rd party marketplaces while making sure their long-term needs are being met as the secondary market grows.A good example of this was The Real Real's partnership with 11 Honoré. @11 Honeré and visionary founder Patrick Herning have been pioneering a path to more inclusive sizing for luxury. The partnership with The Real Real will further this mission by adding some 430 styles of extended-size luxury items to its range of consigned goods and bring awareness to 11 Honeré.It’s key for brands to realize the importance of their items in the secondary market as the market grows. In the end, there is no substitute for owning your future as a brand, and in this case, that involves engaging in the trade-in and resale of your products.The So What-There is no substitute for brands to stay close to their customers by buying back and reselling their items.-Brands need to look after their own long-term interests including protecting their IP. Nobody will protect that other than the brand.Resources:Footwear News | How Trove’s New CEO Gayle Tait Is Helping Brands Like Allbirds & On to Resell Used MerchandiseFootwear NewsAfter taking over as CEO of Trove, Gayle Tait is focused on creating ways to make the secondhand marketplace a more profitable business for retailers and brands. As the appetite to make a positive impact on the environment increases with consumers, retailers and brands like Allbirds and On are turning to Trove for a profitable way to scale their recommerce programs.Apparel brands must note promising resale growth in APACJust-StyleGlobalData reported that the apparel market in the Asia Pacific (APAC) region is expected to reach a compound annual growth rate (CAGR) of 9.3% between 2020-2025, with 27% of shoppers intending to purchase clothing via resale in the next 12 months. With consumers in APAC becoming increasingly more aware of the environmental impact of the fashion industry, will their favorite brands and retailers implement sustainable initiatives in time to keep their business?WWD | It’s a Start: The RealReal Extends it’s Size Offerings With 11 Honore PartnershipWWDFrom Jimmy Choo to 11 Honore, The RealReal is making sure that it has something for everyone. For its newest partnership with 11 Honore, The RealReal will add 430 styles in inclusive sizes. Shoppers that consign plus size apparel within the next six months will receive 30% off their complete transaction.Glossy | Brands are pitching resale as an affordable holiday alternativeGlossyBrands are seeing the value of resale and adjusting their marketing holiday season campaigns accordingly. For example, Queenly had a viral TikTok that got over 2 million views, where they offered a referral program for every new customer. Recurate’s Peak Design, which sells handbags, said this Black Friday they are putting all of their focus on resale after a very successful Earth Day campaign, where they saw a 600% increase without decline in regular sales.Vogue Business | Fast Fashion enters the resale game, but don’t call it sustainabilityVogue BusinessIs launching a resale platform without reducing your overall output truly sustainable? Many would say no. Big fast fashion brands like Shein, Zara, and Pretty Little Thing are eager to enter the resale space, launching pre-loved marketplaces directly on their websites, but critics are saying that if these brands actually wanted to be sustainable, they’d up the quality of their garments. Vestiaire Collective Talks Trust, Tradesy, and Fighting Fast FashionWWDVestiaire introduced its first ever trust report, highlighting its verification process, counterfeit detection rate and many other impressive achievements. Vestiaire Collective's mission is to be the most trusted resale platform, and by sharing this report, it is aiming to increase its transparency and brand image within its community.There’s nothing circular or sustainable about Shein’s new resale platformDAZEDShein released a pre-loved marketplace (Shein Exchange) with the false promise to create a cultural movement of circularity for its community. The marketplace is nothing more than a facade behind an alternative motive to promote more extraction, more production, more waste, and more profit.How Fashion Brands Can Protect Their IP in the Recommerce MarketBloomberg LawAs the recommerce market grows increasingly more important to consumers, brands need to adjust their sustainability metrics, while maintaining brand authenticity and avoiding counterfeits. Retailers and brands are turning to recommerce partnerships, blockchain, and negotiated agreements that help protect the brand’s IP. The Business of Fashion | Secondhand Luxury: Opportunity or ThreatBOFThere is a disconnect in the booming secondhand luxury market. Brands such as Balenciaga and Gucci are truly leaning into the secondhand movement with the creation of resale marketplaces. On the other hand, brands including Chanel and Hermès are still discouraged to adopt resale models in fear that this will drive their normal customer base away from in-store shopping. Sourcing Journal | Take-Back Programs Are Gaining Steam. Do They Actually Work?Sourcing Journal As many brands and retailers join the fight against climate change through circular and sustainable programs, the true lift is daunting. The underlying bias around these intiatives is that production and consumption will go down as these new business models arise around the care and circulation of used items. However, that is not the case as it’s unclear if resale and takeback programs, are providing the solution they claim to be.

It’s been a week for resale. First, fast-fashion giant Shein launched Shein Exchange, a peer-to-peer resale platform powered by Treet as reported by Forbes. Then, H&M launched their take on resale, Re:ware also peer-to-peer and powered by Reflaunt. And finally, Zara announced plans to launch a resale site on November 3rd.In understanding what just happened, let’s look at the incredible similarities across these three new entries into resale: 1. Original items are incredibly cheap, making the resale as low as $1 on H&M’s site, not to mention their $7.99 flat-rate shipping. I simply don’t see the appeal or the economics for customers.2. None of the three are expecting to make money (according to the companies themselves), basically sidelining any of these efforts to public relations and marketing cost centers. 3. All three companies tout these efforts as game-changing shifts toward circular models that keep items in use longer, but I see no path here as these companies make billions on selling new items for cheap while losing money on these resale models.What we are seeing is a combination of two shifts in the landscape. The first is that Resale has become an essential part of brand sustainability efforts–got to have it. The second is it has become increasingly straightforward to launch a resale platform. A decade ago it was eBay and now there are choices and innovations in the space. I also applaud Treet and Reflaunt for building a business with large players.However, as BoF reports, Shien, H+M, and Zara should not be claiming these programs as innovative moves toward a more sustainable future–they are not. Shien, H&M, and Zara are replicating resale models designed for more premium brands. This model will not work with the products these companies sell, they won’t make these companies money and hence won’t replace existing new production models.Perhaps the most interesting part of the new launches is H&M’s approach of selling other brands that they do not sell new. Brands such as Madewell, Abercrombie & Fitch, Banana Republic, and yes... Shien and Zara. As I have shared before, expect more of this because it's just getting started.This past week we saw Amazon partner with a marketplace seller, What Goes Around Comes Around, as reported in WWD and Glossy. This resulted in Amazon listing more than 2,000 handbags from Louis Vuitton, Hermès, Chanel, Prada, and Gucci. Walmart has listed thousands of luxury items for years with the past 2 years via marketplace sellers such as ThredUP. There were over 1,000 Louis Vuitton items on Walmart.com at the time of this Resale Edit. Brands have always cared deeply about the channels and retailers that sell their products as it reflects on the brand and steals market share from legitimate channels. Luxury brands and their lawyers have fought the Gray Market where their brand items show up in Costco, Sam’s Club, or other discounters. This market is legal but against brand policy.But this new reality is not the Gray Market. As customers are increasingly comfortable with buying used items, especially a brand they aspire to from a trusted party, these retailers will source pre-owned items from marketplace sellers.This past week was one more indication that this reality isn’t a future risk, it’s here now and growing fast. As we have seen across some of the best brands in the world, brands know who bought their products and win in buying them back. Supply is key as the point of control allowing brands to either resell their items again or decide where and how the items they have made will be sold.The So What-When creating a resale program ask this question… is this program set up to drive meaningful growth that doesn’t depend on a new production? If the answer is no, you are not likely creating a more circular future-It’s a strategic imperative for premium brands to control their items in the world today. Otherwise, marketplace sellers will make use of these items to steal shares from you and dilute your brand over time Resources:Retail Dive: Retail News and Trends:Shein Jumps into resaleRetail DiveShein launched its resale program, Shein Exchange, in partnership with resale tech firm Treet after seeing its customers resell items on other online marketplaces. Although Shein Exchange is currently open to its US customers, Shein plans to expand the program globally within the next year.Zara enters resale market value with Pre-owned serviceThe GuardianZara is dipping its toe into the resale market. Come November shoppers will be able to book repairs, sell, or donate their unwanted items from the retailer. Paula Ampuero, Head of Sustainability at Zara, said “At this stage, this platform is exclusively conceived as a tool to help customers extend the life of their clothing.”The Business of Fashion: Fast Fashion’s Race Into Resale Has Yet to Shift its Core Business ModelBOFShein enters the resale market, but to many, it seems like performative marketing. With Shein coming out with 1,000 new cheap styles daily, many are wondering if they will even profit from a resale program. It seems as though they are just earning their “trendy green card” and improving their brand image for the masses as there is no current indication of plans to reduce the number of fast fashion items produced.SHEIN enlists Treet for fashion resale platform launchRetail Technology Innovation HubShein Exchange, the retailer’s resale program, is now available for the first time through the Shein app. Over the past few years, the retailer has seen a desire for buying and selling used products from their customers on social media. The goal of Shein Exchange is to give their consumers access to resale as easily as buying something new on the site.Zara boards fashion resale bandwagonAIM GroupWith 62% of Gen Z and Millennials looking to buy secondhand before purchasing new, it’s no surprise that Zara aims to introduce a recommerce aspect to their brand in the U.K. next month. With this addition, customers will be able to resale, repair, or donate Zara clothing via its website, app, or physical location.Glossy Fashion Briefing: With the luxury resale launch, Amazon is selling Chanel and HermesGlossyAmazon Luxury stores have an exclusive partnership with What Goes Around Comes Around, a 29-year-old luxury resale company known for carrying classic handbag brands like Hermès and Dior, and is now selling nearly 300 products on the platform. The goal of What Goes Around Comes Around is to make luxury accessible and working with Amazon allows them to balance exclusivity and availability while providing a safe encouraging place for all people to participate.Forbes: Shein Launches Resale Platform And Aims To Shorten U.S. DeliveryForbesChanel 4’s documentary exposed Shein’s low wages and long hours of workers in factories. In response Shein has launched a resale platform and has opened new distribution centers in the states, acquiring one in Indiana and planning to obtain one in Southern California as well, while it investigates oversea factory conditions. For customers, this means shorter delivery times. Neighbor Introduces End-to-End Recommerce Program For Outdoor Furniture With FloorFloodMartechVibeOutdoor furniture brand Neighbor is using the FloorFound platform to power its recommerce program. High demand has made this program an instant success with 80% of items selling within 30 days. FloorFound will oversee everything from pricing to returns and fulfillment.

Welcome to the first episode of our new series: Amplify Our Voices. A space where we investigate and educate on what is happening to our planet and communities so we can collectively work together as individuals and companies to drive change.Amplify Our Voices for Pakistan: How Consumers and Brands Should Calibrate Efforts Toward Climate EmergencyThe catastrophic floods that have struck Pakistan in recent months make it clear that the devastating impact of climate change is of concern today. The scale of this disaster is unprecedented: flooding has affected an area of land the size of the entire United Kingdom and displaced more than 33 million people, almost the population of California. This natural disaster is the direct result of climate change, which has accelerated the rate at which Pakistan’s glaciers are melting and exacerbated extreme weather events. Pakistan produces less than 1% of global carbon emissions yet it is one of the top 10 countries most impacted by climate change. Sustainability and social responsibility are core values for Trove and our partners, so we have been looking for ways to help. We have identified organizations working at the frontlines supporting climate refugees by providing them shelter, food, access to healthcare, and education as a more extensive rehabilitation effort is underway. Please use the links below to contribute: Live Paklaunch Dashboard to track updates and see how you can help: www.paklaunch.com/floods Edhi Foundation North Americahttps://edhina.orgAkhuwathttps://donate.akhuwat.org.pk/campaign/1365/flood-reliefThe Citizens Foundationhttps://www.tcfusa.org/donation-online/#The Indus Hospital Network https://foihus.org/flood-relief/A special thank you to the team of Pakistani artists who created the podcast art for this epidote and to the United Nations for granting Trove licensing rights to the audio footage from UN Chief Antonio Guterres.

The best piece of the week was @Joel Makower’s, “How to Greenwash Like a Pro.” It’s worth a read. While it is satire, Joel’s larger points play out across the resale news this week. We are witnessing an industry that continues to accelerate around a customer shift to buying used, look no further than the Poshmark deal. This in turn creates a competitive environment with independent marketplaces, as seen in @Forbes “Battle Of Luxury Resale Business Models.” All of this places more pressure on brands to protect their brand equity and own their customers' experience. It's also a good reminder that jumping on the circular bandwagon with marketing isn’t a substitution for required innovation. Let’s start with the Poshmark deal. Bloomberg covered the Poshmark acquisition by Naver, a leading South Korean e-comm platform. I see this as a win for @Manish_Chandra, a pioneer in the resale space, and Poshmark’s investors and the industry. The deal priced POSH at 3.4X their 2022 revenue, a 34% premium to the past 30-day volume-weighted trading average and ahead of more asset-heavy competitors.Other public resale companies such as The Real Real (TRR) and Thredup stock prices were up following the announcement as @Olivia Rockeman points out in her Bloomberg article as an indication of additional M&A activity. While that would surprise me, I view this as opportunistic rather than industry maturity and consolidation. The competition will continue to heat up as more independent retailers such as Vestaire, StockX, and even Goodwill were in the news. As the Sourcing Journal covered, StockX expansion into additional luxury categories will set up more direct competition with The RealReal and Vestaire.Forbes published a piece on Reflant vs The RealReal. The column rightly pointed out that brands supported by B2B players such as Reflaunt will add pressure to Independent marketplaces such as The RealReal. These marketplaces trade on premium brands with little to no value back to the brand. Where I found the article a bit off, was in the competitive match-up as players such as StockX and Vestiaire are far more competitive for The RealReal than Reflant, at least today.Goodwill joins the premium resale market along with brands such as Gucci, Hermes, and Louis Vuitton. I don’t view this as true competition for these competitive independent marketplaces such as StockX as Goodwill lacks the investment in areas such as SEO and dynamic pricing necessary to truly compete here. Goodwill’s announcement of the program targets its aim, “to provide professional training, job placement, youth mentorship, and more to local communities.” This is what Goodwill does best and I believe this move will create more opportunities for them here. It will also create additional places for branded products to show up, making resale innovation and strategy more important for brands.Jimmy Choo, Sando, and DÔEN all launched resale programs. Jimmy Choo launched as a ‘partnership’ with The RealReal which similar to other deals with independent marketplaces is more of a marketing partnership. Brands may gain traffic and earned media but in the end, they are not building a more circular model to stay in touch and own their customer experience.French brands, Sando and DÔEN launched as branded experiences with B2B providers, Archive and Treet respectively. Sando’s storefront experience is appealing, although as with other recent launches the inventory is a bit sparse (about 75 items listed). The challenge with low inventory is first-time customers won’t likely find relevant items and may not quickly return. Ideally, inventory for resale will continue to come from customers via accessible programs such as mail-in and trade-in programs. The DÔEN experience was high-end and as WWD pointed out, certainly wins the ‘best pun award’ titled, ‘Hand Me Dôen.’ The DÔEN experience was not as clear in terms of how the program works but it appears the program is starting with always on trade-in and pop-up flash sales.Resale activity continues to intensify, as there will only be room for a few independent marketplace winners. This makes it more important for brands to have a resale strategy and plan that protects their brand equity and allows them to monetize the full value of the items they design and produce. Some of the programs we saw this week are intermediate steps but fall short of the innovation we need to shift the model–maybe they had an early draft of Joel’s article.The So What:-Brands face more headwinds as competition intensifies within the independent resale marketplaces as more of their product will show up for sale in more places-Don’t confuse marketing activity with innovation that ultimately is necessary to service a new way customers are shopping for preloved itemsSubscribe to The Resale Edit at www.trove.com/blog

The Resale Edit: Fast Fashion, Is (Sadly) Doing Just Fine“As inflation rises, fast fashion proves more tempting” was Glossy’s headline for an insight article this past week. It highlights a new Shein competitor, the Chinese ultra-fast fashion company Pinduoduo, which allows customers to buy thousands of dirt-cheap styles released every week. It’s already been downloaded more than 400,000 times.I like that this article points out economic incentives that drive our choices. We are living in inflationary times and I would expect these will continue given the significant geopolitical, resource, and limits of global production. This backdrop along with less disposable income for the middle class will favor resale as well as fast fashion. We have seen again and again these economic wins out over social stigmas, even around climate change. The growth of resale will favor premium products and fast fashion will (sadly) continue to grow. It will therefore be the middle of the market that faces the greatest headwind.GAP is a poster child for pressure which can be seen in Retail Touchpoints headline, “Athleta Moves Further into Resale, Off-Price.” These are actually two announcements in one headline including Athleta’s expansion of a resale program with ThredUP and partnership with Simon’s Outlet business to bring outlet shopping online.Athleta is expanding the Clean Out program with ThredUP to now include a preloved section on the Athleta website. While I have concerns about the long-term impact of these moves on the Athleta brand, I expect both of these programs will generate near-term traffic and they are certainly another proof point for customers to expect brands to buy back and sell pre-owned items.Balenciaga also announced an expansion of their co-branded Reflaunt trade-in program. There is no commerce element to the program which makes it appear less risky for a brand to see this as simply a traffic driver with sustainability bonafide. However, as resale becomes a more significant portion of luxury, flooding eBay with thousands of Balenciaga items priced for the lowest bidder is not a fantastic outcome for an incredible brand. In addition to longer-term brand equity concerns, there is sustainability consideration for this model. Balenciaga is touting the program as part of the house’s broader sustainability mission. A program based on brands only making money when customers use gift cards on new items does not incentivize a new circular business model. While these programs can keep items in use longer, the incentives are ultimately misaligned with brand sustainability business goals.Finally, Retail Brew published a piece on Aura’s Blockchain Consortium, a nonprofit organization that operates a private blockchain and creates “digital twins”—virtual representations of a physical good—for luxury brands. As stated in the article, I am bullish on the need for luxury brands to up their technology game in preventing counterfeits. These solutions should use digital cryptography and will benefit from incorporating elements of the physical item. While there are certainly ways to do this using blockchain technology, we see other solutions as more practical in the near term. It will be exciting to see this industry take shape and will be essential for luxury brands to participate.The So WhatRetail is facing long-term inflationary pressures. Addressing these will require business model innovation including brand-enhancing resale channelsBrands should be cautious in touting the sustainability benefits of resale programs where the economics are solely based on awarding gift cards. These programs are misaligned with brands moving to more circular modelsUntil Next Week,Andy Ruben, Founder and Executive Chairman of TroveWeek of October 3:Athleta Moves Further Into Resale, Off PriceRetail TouchPointsAthleta has teamed up with ThredUP and Shop Premium Outlets to pilot a new resale program called Always Athleta. This will be a learning opportunity for Athleta to attract new customers and understand consumer purchasing behavior better by allowing a select group of customers to shop a pre-loved section that will have products up to 90% off.Luxury Brands like Balenciaga and Valentino Jump on the Resale Fashion BandwagonFEMALEWith the luxury resale market is expected to reach $51 billion in 2026. Five luxury brands are killing the resale game; Gucci, Valentino, Burberry, and Alexander McQueen. Balenciaga has partnered with Reflaunt to introduce Balenciaga Re-Sell and Valentino has Valentino Vintage. Gucci launched Gucci Vault, an online concept store with ‘virtual shelves’ holding pre-owned Gucci. Burberry joined forces with The RealReal and introduced the ReBurberry Fabric program. Lastly, Vestiaire Collective launched its Brand Approved program a buy-back initiative with Alexander McQueen.Secondhand start-up Gently raises two million dollars in fundingFashion UnitedThe future looks bright when you have raised two million in funding and have created the “Amazon for secondhand purchases.” Gently, allows users to shop from multiple resale platforms in one place and enables shoppers to search, filter, and get alerts from recommerce sites. Gently has 10,000 daily users and is aiming to expand to one million shoppers by 2024.Weekend Briefing: As inflation rises, fast fashion proves more temptingGlossyThe wealthy may not care that handbag prices are increasing exponentially but the more conscious spenders are paying close attention and brands outside of the high end of luxury will need to find a way to prove their value to cash-strapped customers. Even with the ethical and environmental concerns fast fashion still has a great appeal to many. A new Shein competitor, a Chinese fast fashion company, Pinduoduo came out with an app for the U.S. demographic and it’s already been downloaded more than 400,000 times. Luxury resale on the blockchain may be closer than you thinkRetail BrewIs blockchain the future of luxury and Web3? LVMH, Prada, and Cartier formed the Aura Blockchain Consortium, a nonprofit organization that operates a private blockchain and creates virtual representations of a physical good for luxury brands. The idea behind the blockchain is that it is a digital certificate of ownership that can be transferred and help build trust between buyers and brands. BRC publishes guidelines on secondhand and pre-loved itemsFashion UnitedThe British Retail Consortium’s (BRC) goal is to limit items going to landfill by keeping them in circulation longer. With that thought in mind, BRC created a report with input and feedback from retailers, resale platforms, industry exports, and charity retailers dedicated to secondhand and pre-loved items to help the industry work towards a circular economy.Balenciaga Presses Go On Resale Following Successful PilotVogueLuxury brands want to have more ownership of secondhand sales so what do they do? They partner with a resale platform, and after much success, Balenciaga has formally launched a partnership with the resale platform Reflaunt. Reflaunt’s technology allows customers to sell their pre-owned Balenciaga in exchange for store credit. Reflaunt white label resale has been adopted by brands and retailers including Net-a-Porter, Ganni, and Axel Arigato.

The Resale Edit: What Brands Should Consider When Building A Resale ProgramThe only place to start this week is the Charnard’s decision to give 100% of Patagonia to a trust and holding company charged with manifesting Patagonia’s mission: to save our home planet. There are few leaders that live their values with the willingness to discard and invent new structures for the times–Patagnoia’s IronClad Guarantee, 1% for the planet, the Footprint Chronicles, Benefit Corporation, “Don’t Buy This Jacket” and of course Worn Wear. Consistent with the past 50 years, Yvon and Patagonia are still willing to do so, with this recent move. Leadership can be elusive but we certainly know it when we see it. Thank you, Yvon, Milinda, Ryan, and the Patagonia team for continuing to lead.As NYFW wrapped up last week and climate week kicked off this week, Fortune points out the disagreeable truth that climate goals and big fashion business models simply do not align. Although brands and retailers are taking steps to be more sustainable, there is still a disconnect on how many goods a company can make to reach environmental goals. We are not going to address this within our current linear model. And it’s one of the reasons so many fashion brands are launching resale programs. But with all these new programs how can one distinguish between business innovation and marketing? One way is to look at the business model behind the effort. Innovative business models are set up to be profit centers for the business, they address core activities such as buying and selling pre-owned items. Marketing programs have an ROI that drives traffic but are not set up to become core for the business. Saks Off 5th, who expanded their resale efforts this week with LXR and Reflaunt is aiming to make money by buying and selling pre-loved items. This is business model innovation given the ability to scale a profit center. Whereas UK fashion provider, Joules, who also announced a resale program is essentially awarding gift cards to get you back in the store, more akin to smart marketing. Marketing efforts can evolve into business innovation, but approaching resale as a business innovation certainly improves the odds of capturing the customer shift underway.Saks Off 5th initially partnered with LXR back in 2020 selling pre-owned handbags in-store. Their program has now expanded with Rent the Runway and Reflaunt to offer roughly 1,000 items online. Many of the resold items are not typically sold via the Off 5th banner including Hermes, Fendi, Prada, and Tom Ford. This makes sense for a discount retailer who can now buy back and resell higher-end pieces to their value-oriented customer base. This is a business that has the potential to continue to grow, not a marketing program.We will see more of these programs across value-oriented retailers such as Walmart, Target, JCP, and Macy’s as they find new ways to attract and maintain value-oriented customers. As a not-so-small footnote, brands should beware these programs have significant brand risk in the new supply, discounting and merchandising of branded items outside the brand's purview. As compared to traditional wholesale relationships where brands share in revenue, these programs both buy from and sell to customers, bypassing the brands altogether.@James Reinhart wrote a fantastic article in Fast Company comparing fast fashion to big tobacco. James’ points included the social pressures of the newest look and price point with cigarettes in the media and affordability at the time. It’s possible there will be class action lawsuits or the government will regulate fast fashion but even if this does occur it won’t be soon. For now, this article serves more as a billboard highlighting the need for new business models as fashion considers the sustainability implications of the industry.WWD covered lululemon’s annual sustainability reporting which highlighted the challenges of our current commerce model from a CO2 perspective. Lulu shared an 82% absolute reduction, ahead of plan on direct emissions (scope 1 and 2) while indirect emissions (scope 3) increased 4%. Given lululemons growth, 4% would still be commendable by some and it also highlights the innovation needed from new business models such as lululemon’s Like New. Other brands were in the news for sustainability press releases including Puma’s new recycled shoe, others implementing ‘more sustainable’ logistics and packing materials, and Macy’s circularity program. While these make good marketing, many of these efforts, such as the process of producing a shoe from recycled content, is not addressing the systemic problem a growing fashion CO2 footprint–an exception may be Macy’s move to digital samples which can scale and does address core operations. Saks Off 5th and lululemon’s Like New program are examples of business innovation that can ultimately scale where business growth isn’t directly tied to growing CO2 emissions.The So WhatFashion brands who are serious about climate goals will need to innovate profitable circular models. If your resale program doesn’t make money buying and reselling pre-owned items, question if it’s really just a marketing program and won’t address your innovation agenda.Premium and luxury brands get ready for a very different retail landscape where more of your products are repurchased and resold in channels and stores you would disapprove of, bypassing you entirely. In order to control your brand, you will need ways to track and control your items beyond the first sale, owning the resale channel for your items.Week of September 23:Saks Off 5th on Resale: A Golden OpportunityWomen’s Wear DailySaks Off 5th is ready to join resale. Throughout the last several months, Saks Off 5th has been partnering with companies like LXR & Co. and Rent The Runway to start building a network of pre-loved sources. Most recently, Saks Off Fifth launched with Reflaunt introducing menswear, men’s accessories, footwear, and sunglasses into its roster of pre-loved merchandise. What is Driving Luxury Resale’s Push into Physical Retail?The Fashion LawConsumer goods brands benefit from brick-and-mortar stores as physical retail drives higher spending, lower return rate, and acts as a better vehicle for new customer acquisitions. It’s time for resale to get with the “old” way of shopping- in-store. The RealReal, Rebag, and Privè Porter plan to expand their physical store locations to achieve profitability and create the ultimate luxury experience for shoppers. Big fashion can’t align its climate goals with its business modelFortuneAs the crossroads of NYFW and Climate Week meet, so does the disagreeable truth that climate goals and big fashion business models simply do not align. Although brands and retailers are taking steps to be more sustainable, there is still a disconnect on how many goods a company can make to reach environmental goals. Lululemon’s Latest Impact Report Puts Pressure on Decarbonization Women’s Wear Daily Lululemon has already captured the hearts of billions, $1.9 billion in quarterly revenues to be exact. The brand has made amazing strides towards becoming more sustinable, the brand still saw a 4% increase in Scope3 emissions from last year. Lululemon is now putting all of its efforts to focusing on transitioning to renewable, efficient energy. Earth is now our only shareholder.PatagoniaPatagonia is in the business of saving our home planet, by “going purpose.” Ditching the traditional route of going public, Patagonia is choosing to take its wealth and invest in the planet. 100% of the company’s voting stock will transfer to Pataonia Purpose Trust and 100% of the nonvoting stock has been given to the Holdfast Collective, a nonprofit dedicated to fighting the environmental crisis and defending nature. Macy’s rolls out circular servicesEcotextile NewsFor the last 18 months, Macy’s has started integrating new solutions to help conquer its sustainability improvement goals. It’s efforts focus on offering ethically produced products and brands to its customer base, while simultaneously reducing its environment mental impact through logistics. Salesforce Enters the Carbon-Credit BusinessThe Wall Street JournalSalesforce is entering the carbon-credit business with force as it gears up to launch it’s new Net Zero Marketplace for carbon credits. The marketplace will tackle transparency and quality issues in the ever-changing field. It will launch October 9th with almost 90 projects which will support programs such as soil health and renewable energy. Why fast fashion is the next Big TobaccoFast CompanyGen Z is known as being the most eco-friendly generation yet, even though they feed into the addiction that is fast fashion more than any other consumer group. As fast fashion continues to go unchallenged, the more and more it starting to sing the same tune as Big Tobacco, especially when targeting Gen Z. Fashion brands are launching partnerships with sustainable logistics providersGlossyIn effort to support authenticity around new initiatives, retailers like Rebecca Minkoff, EB Denim and Rent the Runway are taping more sustainable shipping and packaging solutions, like Route and Olive. Route takes the heavy lifting out of the post-purchase experience by offsetting shipping emissions through integrated AI tracking parcels from retailer to customer. Ol