PARIS — Don’t put your old Chanel handbag or Isabel Marant miniskirt into storage — vintage sells.
In France alone, interest in secondhand fashion products jumped 30 percent in the last five years, with 43 percent of online shoppers snapping up pre-owned fashion here on a regular basis. In Germany, 55 percent of women are hunting for vintage items, while in the U.K. that number stands at 59 percent.
At the top of their list: clothing, accounting for 36 percent of purchases, followed by handbags at 21 percent, while jewelry and other accessories generate 14 percent of sales.
That’s according to a study conducted by market researcher Ipsos and Vestiaire Collective, billed as Europe’s largest e-tailer of pre-owned fashion and accessories. The Paris-based firm is the midst of an ambitious expansion thanks to a capital injection from private equity fund Eurazeo, which took a minority stake in the company on Thursday.
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Eurazeo, which has also invested in Moncler and Desigual, said it contributed 20 million euros, or $22.5 million at current exchange, as part of a capital increase. This is part of a larger investment of 33 million euros, or $36.7 million, raised by a pool of existing shareholders, which include Condé Nast, Balderton Capital, Ventech and Indinvest Partners earlier.
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Since the Web site launched in 2009, it has raised a total of 60 million euros, or $79.2 million.
Vestiaire operates sites in France, the U.K., Germany, Italy and the United States and in 2014 generated revenues of 46 million euros, or $61.2 million.
Dollar figures are calculated at average exchange rates for the periods in question.
The site posted 85 percent growth in sales volume in the first half of 2015, Eurazeo said.
According to the investment fund, the capital injection will be used to strengthen Vestiaire’s leadership in Europe and accelerate growth in the U.S.
“We see a lot of potential in the market for pre-owned fashion,” Yann-Hervé du Rusquec told WWD, noting how it often serves as a first gateway into luxury for many buyers, long before they even visit the brands’ own Web sites.
“It’s at a discount and it’s easy. And it’s a fast-growing market, in which Vestiaire Collective is a pioneer,” he explained.
The site has four million members worldwide and offers a minimum of 400,000 items at any given time. Each week, 20,000 new items are added to the catalogue after being checked for authenticity by a team of experts.
According to du Rusquec, the sourcing is the site’s biggest asset, helping it grow faster than its competitors. “Counterfeit is a big challenge. This is a new industry and in a way we are opening the market, but you need to check the product to assure quality,” he said.
Sébastien Fabre, founder and chief executive officer of Vestiaire Collective, said the company rejects between 20 percent to 30 percent of items proposed by the user. “We select it upstream and control it physically before reselling to the end-buyer,” he noted.
During the transaction the company, which sells Céline trapeze bags next to Levi’s jeans, retains a commission of between 18 and 33 percent, depending on the product’s value.
Fabre said the bestsellers are the “top five French brands — Chanel, Hermès and the LVMH Moët Hennessy Louis Vuitton brands. Although Isabel Marant has a crazy amount of traction, too, especially among American women,” he said. “Forty percent of Isabel Marant items go to the U.S.”
While France, with 30 percent, still accounts for the lion’s share of Vestiaire’s business, the U.K., Germany, Italy and U.S. are quickly catching up, Fabre said. “Today, 65 percent of transactions are cross-border,” he revealed.
Given that sellers and buyers are often not in the same country shows the global potential and strength of this model, according to du Rusquec. The executive acknowledged that while there is still European ground to be conquered, most notably in Spain and the Nordic countries, the U.S., given its size, will be cardinal in securing Vestiaire’s role as a global leader.
The company has poached Samina Virk, formerly the head of eBay Fashion, to oversee its U.S. business as general manager for the region. The company is setting up logistics in the country and is giving itself “two to three years to build a strong presence,” said du Rusquec.
“The first year we were focused on the catalogue, which is seasonal and on-trend. Now, it’s about building an identity and raising brand awareness so that people know who we are and what we do,” said Fabre, who is determined to make the site a serious player in the fashion industry on par with other luxury fashion e-tailers.
At present, Vestiaire Collective’ main customer is 35 years old and eager to buy into luxury at a discount price, spending 335 euros, or $373, on average. About 90 percent are women and 75 percent return to the site to shop.
The company is betting on the growing appetite for digital luxury shopping worldwide, which, as reported, is estimated to triple to 70 billion euros, or $78 billion, by 2025, according to McKinsey & Co., making e-commerce the world’s third-largest marketplace, following the U.S. and China.
Among the biggest challenges the digital luxury trade is facing, McKinsey lists a lack of resources, risk-averse enterprise culture and the fact that the most coveted digital talent is rarely attracted by the world of luxury, though this week’s appointment of former Apple executive Ian Rogers as LVMH Moët Hennessy Louis Vuitton’s chief digital officer is likely to bring some action into the game.
Technological innovation is key, said Fabre, agreeing with McKinsey’s findings that luxury consumers are the most digitally savvy and most social-media active out there.
“Fifty percent of our transactions and 60 percent of traffic are achieved via mobile phones. Especially in the U.S., we need to be more aggressive. It’s about experience. The future is going to be social,” he predicts.
The firm has set a business target of 100 million euros, or $112 million, in gross merchandise value, or volume of transactions, for 2015.