Like the plot of a confusing time travel movie, some of the most expensive brands in the world are struggling to deal with a fierce competitor: themselves, from the past.
Driving the news: Shoppers are increasingly deciding that second-hand luxury products are good enough, with sales on popular resale platforms like TheRealReal now outperforming the growth of new product sales at high fashion houses like LVMH and Gucci, per the Wall Street Journal.
- The market for used luxury goods grew to US$56 billion last year — nearly three times as big as it was a decade ago and equivalent to all of the business that luxury brands did through department stores last year.
- Canadian platforms like Montreal-based Two Authenticators and local reseller Retyche have benefited from the resale market boom in Canada.
Why it’s happening: After years of price hikes, higher inflation and shaky economic conditions, Gen Z and millennial shoppers in particular have turned to the cheaper (but still bougie) options on the resale market.
- Online second-hand marketplaces specializing in lux products have also made buying second-hand easier and reduced the risk of getting duped by knock-offs.
Why it matters: The luxury sector is already struggling, and the resale boom is now leading to more customers bypassing primary sellers altogether. After years of growth, the market for expensive status symbols may be reaching a saturation point.
Big picture: The strength of the secondhand market has driven brands like Gucci, Coach and Balenciaga to launch their own resale programs. Beyond the high fashion world, Canadian brands like Lululemon, Simons, and Arc’teryx have also introduced resale platforms.—LA