Secondhand Luxury Boom Forces Fashion Houses to Adapt and Innovate

The $50 billion secondhand luxury goods market is booming as more and more consumers opt for sustnable shopping options and the convenience of online platforms like The RealReal, Vestire Collective, and others. Over the past four years, sales in this segment have nearly doubled to constitute 12 of the value of new luxury items' market, according to Bn Company estimates, reported by The Wall Street Journal.

While many fashion houses are embracing the tr, there's concern over authenticity: some worry about fakes being sold on these platforms since proper verification processes might not always be in place. Additionally, brands are feeling pressure as consumers now have a clearer understanding of which designer items retn their value and which don't. This insight impacts resale prices significantly.

For instance, the pre-owned Hermes bags fetch up to 25 more than their new counterparts; meanwhile, Rolex and Patek Philippe watches are sold at average premiums of 20 and 39, respectively. Yet, not all luxury brands benefit from this market surge. Gucci, Balenciaga, and Bottega Veneta pieces have dropped by around 10, 14, and 23 in resale value over the last year.

Louis Vuitton handbags lose about 40 of their original value when resold, with Christian Dior bags seeing nearly a halved value. A few companies are taking proactive steps to mntn value by partnering directly with online resale platforms or launching their own programs. Burberry teamed up with Vestire Collective, while Gucci has joined forces with The RealReal.

However, for high-value, low-volume brands such as Rolex, the secondhand market works well. For clothing designers and handbag makers, however, the scenario is different: they would need to buy back vast amounts of pre-owned stock which could potentially dilute their profits. Therefore, many luxury brands are trying various strategies to capitalize on this burgeoning sector without negatively impacting their original pricing or brand image.

by Rachel Cormack for Robb Report highlights how the secondhand luxury market continues to grow, challenging traditional salesand pushing fashion houses to innovate in their approach to managing and leveraging it.
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