Revenue for Richemont rose by 24 percent on an actual exchange rate basis (and 16 percent on a constant basis) to 9.7 billion euros ($9.88 billion) for the first six months of the fiscal year, while operating profit rose by 26 percent to 2.7 billion euros. In an H1 report on Friday, the Swiss luxury goods group said revenue was driven by “strong” demand for jewelry from Cartier and Van Cleef & Arpels, with sales in the jewelry division up by 24 percent for the first half (ending on September 30) and watch sales up by 22 percent. “This points to mega-brands at the top of their categories continuing to extend their lead against competitors,” Bernstein analysts said in a note on Friday.
The regional breakdown: Compared to H1 2021, Richemont revealed that it saw double-digit sales increases “across all business areas, channels and regions, excluding Asia Pacific, where sales grew by 3 percent” as a result of “temporary boutique closures in mainland China and Macau due to the continued enforcement of the zero-Covid policy.” The European market delivered a 45 percent YoY revenue increase for Richemont, “fueled by strong local demand and resumed inbound tourism from the U.S. and the Middle East following the easing of most restrictions on international travel.”
In N. America, reported sales grew by 22 percent, “continuing trends seen in the first quarter of the financial year, notwithstanding many Americans purchasing abroad.” Growth momentum in the U.S. was the highest for the watch division, per Richemont. As for Japan, which posted the “strongest regional sales growth rate” of 76 percent, sales came by way of “strong domestic demand, a nascent return of tourists and lower comparatives due to boutique closures in the prior-year period.” And finally, in the Middle East & Africa, sales rose by 12 percent thanks to “solid domestic and tourist spending, notably in Dubai.”
According to Bernstein’s note, Richemont “sees strong underlying demand from consumers, first from Chinese nationals and in more recent times from customers in the USA, Europe and Asian countries outside of China, across age groups,” with younger consumer cohort proving to be particularly strong, “partially because of the marketing efforts carried out in the past few years.”
In terms of the physical retail vs. online breakdown: Richemont revealed that the retail sales channel grew in all regions, “most notably in the Americas, Europe and Japan,” reaching a 21 percent increase, while online sales rose by 9 percent YoY “as the Group’s Maisons continued to expand their digital presence.” The largest progression in the period came from the Specialist Watchmakers where online retail sales reached 3 percent of sales. “Overall, online retail sales contributed 6 percent to Group sales, broadly in line with the prior-year period,” the group reported.
Richemont noted that “following the reclassification of YNAP sales to discontinued operations, ‘Online retail’ now comprises online retail sales directly generated by the Group’s Maisons and Watchfinder.”
As for the group’s individual divisions: Its three Jewelry Maisons – Buccellati, Cartier and Van Cleef & Arpels – generated a combined 24 percent YoY increase in sales for a total of 6.34 billion euros, with “all product categories” performing well. “Iconic jewelry collections, such as Clash and Trinity (Cartier), Alhambra and Fauna (Van Cleef & Arpels) and Opera Tulle and Macri (Buccellati), to name a few, continued to outperform.”
Richemont management said in a call with analysts on Friday that they see “untapped opportunities in the branded jewelry segment alongside strong pricing power.” At the same time, though, they also see “intensifying competition in hard luxury” – presumably from LVMH with its budding Tiffany & Co. revamp, for instance – “and is prepared to continue to invest, when needed, to maintain a leading position.”
The “Specialist Watchmakers” division generated 2.04 billion euros (up 22 percent), with performance here driven by “strong direct-to- client sales: Retail and online retail sales continued to expand sharply, and combined, contributed to 54 percent of the Specialist Watchmakers sales.”
Finally, the “Other” division – which includes the Fashion & Accessories Maisons, Watchfinder, the Group’s watch component manufacturing and real estate activities – generated 1.29 billion euros in revenue. “Nearly all Maisons recorded strong growth, with Delvaux and Peter Millar being particularly noteworthy,” according to Richemont. Alaïa sales also “grew sharply, benefiting from a renewed creative vision.”
Delving into the headline-making YNAP deal, Richemont chairman Johan Rupert stated on Friday that the agreement for Farfetch and Alabbar to acquire 47.5 percent and 3.2 percent of YNAP, respectively, which leaves Richemont holding 49.3 percent, “will realize my long-standing goal of making YNAP a neutral industry- wide platform, with no controlling shareholder.” Richemont will receive Farfetch shares, “expected to represent 12-13 percent of Farfetch’s issued share capital, to further align interests,” he stated, noting that “subject to a number of conditions, including the receipt of certain antitrust approvals, the initial stage of the transaction is expected to complete before the end of calendar year 2023.” By that point, he says that Richemont’s Maisons will “adopt Farfetch’s technology to create the best ‘route to market’ and realize their ‘Luxury New Retail’ vision.”
H&M is facing another class action lawsuit over its marketing of fast-fashion apparel and accessories as sustainable. According to the complaint that they filed in a federal court in Missouri on November 3, Abraham Lizama and Marc Doten (the “plaintiffs”) allege that H&M has engaged in “unlawful, unfair, deceptive, and misleading business practices” by way of the marketing and sale of its “self-proclaimed sustainable clothing line called the ‘Conscious Choice’ Collection.” While products in this collection are not “sustainable” or “environmentally friendly,” the plaintiffs claim that the Swedish apparel giant markets them as such, thereby, running afoul of various states’ laws, including those in California and Missouri.
Setting the stage in their complaint (and mirroring similar claims made in other sustainable marketing-focused complaints filed over the past couple of years, in particular), Lizama and Doten claim that “in recent years, consumers have become significantly more aware of and sensitive to the impact of clothing and household products on the environment.” Consumers are “seek[ing] out and will[ing] to pay a premium for products that are responsibly made, including products that will not negatively affect the environment,” the plaintiffs state, asserting that “as a result, demand has increased for ‘green’ products that are sustainable and environmentally friendly.”
“In response to consumers’ desire for more sustainable and environmentally friendly clothing products,” and knowing the pricing power that comes with marketing products as such, Lizama and Doten allege that “many companies” – including H&M – “greenwash their products by deceptively claiming that their clothing is made from materials that are more sustainable and environmentally friendly.” Specifically, they assert that H&M “markets and labels products [as] ‘Conscious Choice’” even though they “not made from sustainable and environmentally friendly materials.”
H&M further pushes its “false” sustainability narrative, the plaintiffs claim, by way of green-hued hangtags; statements on its website about its supposed sustainability credentials; and “marketing, advertisements, and social media” campaigns that “center around ‘green’ imagery of Conscious-clad models surrounded by lots of grass and plush green plants.”
Against this background, H&M’s “sustainability” marketing and labeling – which it allegedly uses to “increase profits and to gain an advantage over its lawfully acting competitors” – serves to “deceive consumers” like the plaintiffs, who argue that they would not have bought the “Conscious Choice” products had they known that they were “not made from sustainable and/or environment friendly materials.” Or if they did buy them, they would have opted to pay “a substantially reduced price.”
Price Premium Claims
Since they “reasonably” relied on H&M’s marketing and paid a premium as a direct result of its “misrepresentations,” the plaintiffs argue that they – and other class members – “have suffered economic losses and other general and specific damages, including but not limited to the amounts paid for the products [and] premiums paid for the products.” The price premium element here is significant, as it is at the heart of the plaintiffs’ ability to show that they have suffered the necessary injury to have standing to sue.
Not an untested claim, other plaintiffs have successfully made similar price premium-based arguments in connection with companies’ allegedly deceptive sustainability marketing campaigns. For instance, a U.S. District Court for the Southern District of New York judge found this summer that a consumer who alleged that bottling company Niagara made the “false and misleading” representation that its water bottles are “100% Recyclable” adequately pled standing for damages (but not injunctive relief) by alleging that she paid a price premium based on that misrepresentation.
Before that, a federal district court in Illinois determined in a case against supermarket chain ALDI that it was enough for the plaintiff to allege that she paid a premium for what she believed was a “sustainably sourced” product, thereby, “going beyond merely alleging that she would not have bought the product absent the allegedly deceptive practice.” To allege injury under a price premium theory, “a plaintiff must allege not only that the defendants charged a price premium, but also a ‘connection between the misrepresentation and any harm from, or failure of, the product,” the court stated.
With the foregoing in mind, the plaintiffs claim that H&M engaged in negligent misrepresentation and fraud, and violated Missouri’s Merchandising Practices Act, California’s Unfair and Deceptive Acts and Practices Law, California’s Consumers Legal Remedy Act, and California’s Business and Professions Code, which generally prohibit parties from engaging in “unlawful, unfair and/or fraudulent business practices,” and making “misleading statements and fraudulent omissions regarding the quality and characteristics of” its products.
In addition to class action certification, the plaintiffs are seeking monetary damages (of more than the $5 million class action threshold), and an order requiring H&M to “immediately cease and desist from selling its misbranded products in violation of law” and to undertake a “corrective advertising campaign,” among other things.
A Rising Number of Cases
For the most past, brands have been able to market their offerings with often-vague sustainability-centric buzzwords without pushback from regulators or consumers, but that is swiftly changing. Lizama and Doten’s lawsuit against H&M marks the second “misleading” marketing suit that has been lodged against the fast fashion behemoth in the past several months; it was sued this summer for allegedly using “falsified [sustainability] information that did not comport with the underlying data.” (That case is still underway in the U.S. District Court for the Southern District of New York.)
A growing list of other companies have also been sued on relatively similar grounds – with mixed results. A case lodged against Canada Goose in 2020 over “misleading” claims that it is dedicated to “ethical, responsible, and sustainable sourcing,” for instance, survived a motion to dismiss earlier this year before settling out of court. Around the same time, Allbirds escaped the false advertising suit it was facing, with a New York federal court granting its motion to dismiss this spring.
Ultimately, experts anticipate that regulators and environmental groups – and seemingly, class action plaintiffs, as well – will devote increasing attention to the validity of claims made by companies in regard to their environmental, social, and governance efforts. “Companies relying on environmental attributes, such as carbon offsets, to reach climate change goals,” and/or that are making use of allegedly “environmentally friendly” materials and marketing such efforts, “should be as careful and specific as possible when making these claims to avoid negative press and/or regulatory or legal violations,” Eversheds Sutherland stated in a recent note. And in addition to ensuring that claims are accurate and can be substantiated at the time that they are published, “Periodic reviews are warranted to keep up with a rapidly evolving landscape.”
A rep for H&M told TFL in response to the lawsuit, “We are taking the allegations very seriously and are looking into them thoroughly.”
Vogue has landed a win in the first round of a lawsuit against Drake and 21 Savage over their unauthorized use of the magazine’s trademark to promote their newly-released album. On the heels of Advance Publications d/b/a Condé Nastfiling a trademark infringement suit against Drake and 21 Savage on Monday, Judge Jed Rakoff of the U.S. District Court for the Southern District of New York ordered that the two musicians immediately refrain from using Vogue’s trademark-protected name to promote their album, Her Loss, and continue to hold off from doing so until at least November 22 when counsel for the parties are slated to appear in court to show cause for a longer-term preliminary injunction.
In the brief order issued on Wednesday, Judge Rakoff found that Condé Nast has a likelihood of success on its trademark claims in light of Drake and 21 Savage’s creation and dissemination of “images of a counterfeit cover of Vogue magazine featuring the Vogue mark and an image of [themselves], as well as copies of a counterfeit magazine purporting to be a genuine issue of Vogue magazine.” Specifically, the court stated that, “among other things, the defendants’ actions are confusing consumers about the origin, sponsorship, or approval of the counterfeit cover and counterfeit magazine, misleading consumers to believe that these are genuine and authentic materials associated with Condé Nast and Vogue magazine.”
Condé Nast pointed to media articles linking the musicians’ faux magazine cover to Vogue, and social media user comments that it claims establish that consumers are confused about the nature of the allegedly infringing promo campaign and that reflect “the widespread belief that the counterfeit issue and counterfeit cover disseminated by the defendants were real.”
“A temporary restraining order is necessary … to protect the public from confusion, deception, and mistake, and to protect Condé Nast from immediate irreparable injury,” according to the court, which ordered that Drake and 21 Savage be barred from disseminating more of the counterfeit materials.
Additionally, the court is requiring Drake and 21 Savage to “take down and remove all existing internet and social media posts on all websites and social media accounts … that contain or reflect (i) any depictions of or references to the Counterfeit Magazine and/or the Counterfeit Cover, (ii) any use of the [Vogue] trademarks for commercial purposes, including … to advertise, market, or promote the album Her Loss, (iii) any use of [Anna] Wintour’s name, image or likeness for commercial purposes, and/or (iv) any false or misleading statements or misrepresentations concerning the Counterfeit Magazine, the Counterfeit Cover and/or Drake and 21 Savage’s participation or appearance in Vogue magazine.”
Still yet, the musicians are directed to “take down and remove from public display and circulation all existing physical print posters, in all locations, depicting the Counterfeit Cover” – and remove from circulation “all existing physical copies of the Counterfeit Magazine” – that were displayed or circulated by them or at their direction.
In its complaint on Monday, Condé Nast claims that it attempted “resolve this matter amicably” with Drake and 21 Savage “as early as October 31” in order to “curtail further public confusion” before the release of their album on November 4, “Nothing was done, with the defendants continuing to benefit from the infringing social media posts that would take seconds to take down.” The defendants’ “flippant disregard for Condé Nast’s rights have left it with no choice but to commence this action,” Condé contends, setting out federal and state law claims of trademark infringement/ counterfeiting, false designation of origin, and false advertising, as well as violations of New York General Business Law.
As of the time of publication, an Instagram post depicting the cover that previously appeared on Drake’s and 21 Savage’s respective Instagram accounts had been removed.
UPDATED (Nov. 17, 2022): In order “to avoid unnecessary cost and expense,” Drake and 21 Savage consented to a preliminary injunction “without conceding any liability with respect to the claims asserted by Condé Nast in this action, and without conceding any wrongdoing on their part.” Among other things, the injunction prohibits the musicians from “using displaying, disseminating, or distributing copies of the Cover and Magazine,” and from using the Vogue trademark or any confusingly similar marks in a commercial capacity.
Secondary fashion sales are booming, with the global market for pre-owned apparel generating a whopping $40 billion per year, according to Boston Consulting Group, and growing at a rate of 15 percent per annum, as consumers increasingly tap into the online consignment segment, new market entrants rush to meet burgeoning demand, and existing players look to differentiate themselves and their value propositions. Against this background, funding keeps pouring into the secondary market – whether it be funneled into new resale platforms or already-established ones that are looking to expand their operations, including in an international capacity – and all the while, given the increasingly crowded nature of the market, consolidation is starting to come into effect, with existing entities joining forces to grab a bigger share of the market.
With so much activity underway on the resale and rental space, we have put together a (running) timeline of investments and M&A events to provide a broad overview of which players are raising funds, which are merging together, and what the trajectory of this segment of the market – which only appears to be gaining in steam – looks like more generally …
Nov. 10, 2022 – Yaga Raises €2.2 Million in Bid to Become the “Depop of Africa”
Yaga, an Estonian-founded e-commerce startup, has raised €2.2 million in a round led by Startup Wise Guys, with participation from Trind Ventures, Specialist VC, and Rubylight. Founded in 2019, Yaga enables customers in growing markets in Asia and Africa to buy and sell pre-owned fashion. Yaga founder and CEO Aune Aunapuu says the company will use the new cash to “continue its rapid growth over the next year,” specifically aiming “to develop the company’s platform, grow its team, and attract new customers.”
Nov. 7, 2022 – Pre-Owned Luxury Rental Co. Vivrelle Closes $35M Series B
Pre-owned luxury rental membership company Vivrelle closed a $35 million Series B financing round led by 3L Capita, with participation from Origin Ventures, Chapford Capital Group, Plus Capital, actresses Lily Collins and Nina Dobrev, and reality star/influencer Morgan Stewart McGraw. The funding, which follows from 4-year-old Vivrelle’s $26 million Series A in April 22021, will be used to “promote accelerated growth across all verticals of the brand’s business.” New York-based Vivrelle’s co-founder and CEO Blake Geffen said, “We look forward to expanding Vivrelle on many fronts, including our inventory offerings, opening additional showroom spaces, and growing our hard working team.”
Nov. 4, 2022 – Treet Raises $3.5M in Seed Round
Treet, which works with brands ranging from ultra-fast fashion giant Shein to cult-favorite brand Dôen, raised $3.5 million in a seed round led by First Round Capital. The San Francisco-based resale platform says it will use the new funds to “increase recruitment, accelerate brand partnerships and expand services.” The round brings the total funds raised in pre-seed and seed funding rounds to $6.4 million.
Nov. 1, 2022 – Luxury Platform Plum Raises $100M in Series C
Pre-owned luxury fashion platform Plum announced on November 1 that it raised $100 million in a Series C round led by Tencent-based pre-owned marketplace Zhuanzhuan. Beijing-based Plum’s co-founder and CEO Xu Wei said in a statement that the funds will be used to upgrade Plum’s services, user experience, product R&D, and database construction. The round comes amid striking growth for Plum, which surpassed rival luxury e-commerce platform Secoo in terms of site traffic in Q4 2021, and doubled revenues in 2022 compared to the year prior.
Oct. 13, 2022 – Goat Group to Acquire Grailed
Goat Group Inc. will acquire Grailed in furtherance of an effort to grow its footprint in the secondary apparel market. As Bloomberg reported on October 13, “Grailed, a peer-to-peer fashion site, will continue to operate under its own brand and will integrate Goat’s operations infrastructure, including shipping and payments” as part of the deal, the terms of which were not disclosed. “We’ve been continuing to see growth across our businesses, especially in apparel and accessories, which have doubled the past 12 months,” Eddy Lu, co-founder and chief executive officer of Goat Group, told Bloomberg. “When you’re looking to accelerate growth even further, that’s when consolidation makes sense.”
Goat Group currently owns GOAT, the global platform for new and used sneakers, apparel and accessories, as well as rare sneaker-reseller Flight Club and resale sneaker and apparel brand Alias.
Oct. 3, 2022 – Naver Corp. to Acquire Poshmark in $1.2 Billion Deal
Naver Corp will acquire resale platform Poshmark for $1.2 billion in a deal that Naver says values Poshmark at about $1.6 billion, including about $580 million of cash reserves. The Seongnam-based internet conglomerate, which owns South Korean’s top search engine, will pay $17.90 in cash for all of Poshmark’s issued and outstanding shares, a sum that is strikingly less than the $42 per share that Redwood City, California-headquartered Poshmark priced its January 2021 IPO. Naver says that it expects the deal – which will “expand and diversify [its] leading e-commerce platform, strengthen its community with a global social network of younger users, and position it to capitalize on the global online fashion re-commerce and sustainable economy opportunity” – to close by Q1 of 2023.
In a statement, Naver CEO Choi Soo-Yeon said, “The combination will create the strongest platform for powering communities and re-fashioning commerce. Poshmark is the definitive brand for fashion in the United States that provides a social network for buying and selling apparel. Naver’s leading technology in search, AI recommendation and e-commerce tools will help power the next phase of Poshmark’s global growth.”
Sept. 20, 2022 – Impossible Kicks Raises $3 Million in Series A
Sneaker and streetwear reseller Impossible Kicks (“IK”) announced the close of a $3 million Series-A equity raise on September 20, bringing its total funding raised to $7 million since its founding in February 2021. In a statement, IK expects $55 million-plus in sales in 2022, up from $15 million in sales in 2021. The Irvine, California-based company will use the cash to facilitate its “continued expansion plan across the United States, which includes two new locations prior to the end of the year and nine additional storefronts in 2023.” (As of Sept. 2022, the brand supports 15 storefronts across nine states – including California, Colorado, Connecticut, Florida, Michigan, New Jersey, New York, North Carolina, and Texas.)
“With an unrivaled brick and mortar presence,” IK says it “will also augment its e-commerce and digital efforts, including the development of proprietary products.”
Aug. 25, 2022 – Sneaker Trading Co. Tradeblock Raises $8.9 Million in Seed II Round
Houston-based Tradeblock has raised more than $8.9 million in seed funding from investors Courtside VC, Trinity Ventures and Concrete Rose Capital, the company announced August 25. The company is planning a rolling close to its current Seed II round and expects to bring in an additional $4.5 million from investors by close. Launched in 2020, Tradeblock consists of a barter-based trading platform for shoe collectors. With the new funding, the company plans to invest in expanding its authentication and logistics efforts, as well as its data science capabilities to better enhance the platform’s virtual bartering experience.
Aug. 24, 2022 – Reflaunt Raises $11 Million in Series A
Reflaunt closed its Series A round with a total of $11 million in funding, the the London and Singapore-based resale-as-a-service company announced on August 24. The close comes a couple of weeks after the circular fashion service provider first revealed that it had welcomed $5.2 million in funding from the likes of Bombyx Capital Partners, Shanghai-based Ventech China, and TLF Ventures. Global Blue, a Swiss-based tourism shopping tax refund company, also participated in the Series A round, along with early investors, including Swarovski’s creative director Giovanna Battaglia and American retail conglomerate Madaluxe Group.
Reflaunt says it will use the new cash to expand its services and secure new partnerships with luxury brands and retailers. “We have integrated the resale experience in the brand’s ecosystem, which allows us to record the product’s digital ID at the moment of check-out and foster a seamless resell-in-a-click experience when the customer is ready to give the product a second life,” Reflaunt co-foudner and CEO Stephanie Crespin said in a statement.
Aug. 22, 2022 – Trenbe Raises $25.2 Million in Series D
South Korea-based luxury goods marketplace Trenbe announced on August 22 that it raised 35 billion won ($25.2 million) in a Series D funding round, which included investors, such as IMM Investment and Atinum Investment. Gangnam-headquartered Trenbe says that it will use the funds to “diversify its business and improve customer experience.” The round follows from the company’s July 2020 Series B, in which it raised 11 billion won.
Jul. 15, 2022 – Resale Platform Galaxy Raises $7 Million in Funding
Gen-Z-focusedpre-owned fashion platform Galaxy has raised $7 million in new funding from investors that include Snap Inc’s Yellow Accelerator, Floodgate, RGH Capital, Turner Novack’s Banana Capital, and Homebrew. Launched in August 2021, the company combines live-shopping and fashion resale in order to “build entertaining and engaging experiences that generate explicit data” – via machine learning – “where users tell us what they like by interacting with our product,” CEO Danny Quick stated in announcing the round. The company says that it will use the newly-raised cash to implement “new, user-friendly features and increased opportunities for creators to feel empowered and earn a living on their own terms, in their own time.”
May 9, 2022 – Carousell to Buy Up Refash
Singapore-based online classifieds giant Carousell has signed off on a deal to acquire secondhand retailer Refash for an undisclosed sum, as the resale market continues to grow in Asia. Carousell said in a statement that 7-year-old Refash, which touts itself as an “online thrift store,” will continue to operate its own brand, as distinct from the Carousell entity, and that the acquisition is expected to “drive a synergistic partnership between the two marketplaces.”
Apr. 8, 2022 – Sneaker Marketplace SoldOut Raises $33 Million
Korean sneaker marketplace SoldOut raised $33 million in a funding round led led by Korea online retail titan Musina and FinTech Dunamu. The nearly 2-year-old resale company will use the funds to fuel its expand into new product categories and build out its customer experience, including by upgrading its platform and opening a second inspection center in Seoul.
Mar. 15, 2022 – Vestiaire Acquires Tradesy
French resale company Vestiaire Collective announced its acquisition of Tradesy, “a U.S. pioneer in the fashion resale industry,” on Tuesday. Terms of the deal were not disclosed, but the companies said in a statement that by joining forces, they will “significantly increase the size and reach of their peer-to-peer marketplaces, to the direct benefit of their sellers and buyers. The combined company will boast a membership community of 23 million, a catalog of 5 million items and a Gross Merchandise Value exceeding $1 billion. Customers of both Vestiaire Collective and Tradesy will significantly benefit from the companies’ alliance.”
*As of August 2022, Vestaire announced that it would fold Tradesy into its own brand in furtherance of a larger effort to bolster its presence in the U.S. market.
Dec. 15, 2021 – Rebag Raises $35 Million in Series E
Rebag has raised $35 million in funding a Series E round, bringing the 6-year-old resale company’s total funding to $103 million. “Following a strong year driven by technological advances and category expansion,” Rebag says that the round – which was led by private equity firm Novator with participation from existing investors, such as General Catalyst – “positions [it] for its next cycle of innovation and accelerated growth,” and that the investment funds will be used to further build upon Comprehensive Luxury Appraisal Index for Resale, its proprietary software aimed at bringing transparency to the luxury resale industry. The company says it will also use the round to scale its tech-enabled brick-and-mortar business.
Dec. 9, 2021 – Farfetch Acquires LUXCLUSIF
Fashion e-commerce platform Farfetch announced on December 9 that it has acquired resale platform LUXCLUSIF, including the company’s technology platform, for an undisclosed sum. This deal will allow FARFETCH to “significantly accelerate its resale capabilities through the development of key technology and service features such as automated pricing, and faster geographic and category expansion of its resale service, FARFETCH Second Life,” the London-based company stated.
Founded in 2013, LUXCLUSIF is a B2B service provider with “a successful turnkey solution enabling the acquisition, authentication and sale of second hand luxury goods to – and from – auctions, retailers, e-commerce platforms, and stores worldwide,” the companies said in a statement. “Together, FARFETCH and LUXCLUSIF can leverage these capabilities and positioning to become the global platform for pre-owned luxury for both customers and industry partners.”
Nov. 29, 2021 – eBay Acquires Sneaker Con’s Authentication Arm
eBay announced on November 29 that it has entered into a definitive agreement with Sneaker Con Digital under which it has acquired Sneaker Con’s authentication business, a leading sneaker authenticator with operations in the U.S., U.K, Canada, Australia and Germany. According to a statement from eBay, “The acquisition is an extension of the ongoing collaboration between [itself] and Sneaker Con, which has been critical to powering eBay’s Authenticity Guarantee. The service, which eBay launched in October 2020, offers full vetting and verification of select sneakers bought on the marketplace by a team of Sneaker Con’s industry experts.”
Additionally, the marketplace stated that its “Authenticity Guarantee has significantly changed the way people buy and sell sneakers on [its site], as evidenced by quarter over quarter category growth. In just over a year, more than 1.55 million sneakers have been authenticated globally on eBay.”
Nov. 19, 2021 – Marque Luxury Raises $20 Million
Marque Luxury has secured $20 million in funding through an investment by Provident Capital Partners, the Irvine, California-based reseller announced on November 19, saying that the round “follows a period of tremendous growth for MARQUE Luxury, which has opened numerous re-commerce hubs in the United States and several hubs in Asia during the last year and has aggressive plans for future expansion.” The 4-year old company says it will use the new cash to “drive continued business expansion on an operational scale focused mainly in North America,” to “support its omnichannel strategy and allows [it] to generate business activity in the global market on a business-to-business and business-to-business-to-consumer basis.”
Nov. 17, 2021 – StockX Acquires Scout
In its first acquisition, StockX has bought up Scout, a leading developer of power seller tools that is already serving more than 10,000 sneaker resellers around the world. StockX says that the new technology will enable it to “ramp up inventory” – which is, of course, the lifeblood of resale platforms and the primary driver of consumer demand – thanks to Scout’s “best-in-class automation, inventory management, tracking and integration with marketplaces.” At the same time, StockX states that the move will help its marketplace sellers to “accelerate their businesses,” presumably a bid to attract sellers in an increasingly competitive resale market, where no shortage of other resale players have taken to focusing on pre-owned sneakers and streetwear.
In addition to onboarding Scout’s product, StockX confirmed that it will bring on the company’s team three co-founders and seven employees, who “bring their deep experience as sneaker resellers and developers of inventory,” as aims to scale seller business operations.
Detroit-based StockX, which revealed that it surpassed 6.5 million lifetime buyers and 1 million lifetime sellers in the first half of 2021, has been building out its initially sneaker-focused offerings since its founding in 2016 and expanding internationally. In the wake of its latest funding round, a Series E-1 round that closed in April 2021, the company boasts a valuation of $3.8 billion valuation.
Oct. 13, 2021 – Poshmark Acquires Suede One
In its first-ever buy-side move, Poshmark announced on October 13 that it has acquired Suede One, an authentication platform that “combines machine learning, computer vision and expert human review to virtually authenticate sneakers,” with Suede One’s team joining Poshmark effective immediately. According to Poshmark, theacquisition “will scale [its] authentication capabilities and accelerate momentum in high-growth secondhand categories, especially sneakers and luxury,” and reflects the secondhand marketplace’s focus on “strategic investments that drive continued platform innovation, accelerate growth in high-growth resale categories and enhance the user experience to attract and retain both buyers and sellers.”
Founded in 2020, Suede One “has built impressive capabilities in virtual authentication that will allow us to deliver tangible benefits to our community, scale our authentication services in a meaningful way, and accelerate our momentum in sneakers as well as luxury goods, two of the fastest-growing categories in the resale space,” according to Poshmark founder and CEO Manish Chandra.
In a release on Wednesday, Poshmark detailed Suede One’s process, revealing that “for popular sneakers such as Jordan 1s and Yeezy 350s, Suede One can automatically authenticate the majority of submissions with greater than 99 percent accuracy, based on internal testing. For other sneaker types, human experts review the submission with help from the company’s proprietary authenticator tool.”
Sept. 22, 2021 – Vestiaire Raises $209 Million in Venture Round
French resale company Vestiaire has raised 178 million euros ($209 million) in a September 22 venture round which included participation from two new investors, SoftBank Group Corp and Generation Investment Management, bringing its valuation to $1.7 billion dollars. To date, Vestiaire has raised $663.3 million, per CrunchBase.
Sept. 16, 2021 – Tradesy Raises $67 Million in Series D Round
Resale platform Tradesy has raised $67 million in a September 16 Series D round led by led by Foris Ventures, which is Kleiner Perkins head John Doerr’s family office. To date, the company has raised $200.7 million over a series of eight rounds, according to CrunchBase.
Sept. 16, 2021 – Grailed Closes $60 Million Series B Round
Men’s fashion and streetwear-centric marketplace Grailed announced the closing of a $60 million Series B funding round on September 16, which was led by fellow resale player GOAT Group and with participation from Groupe Artémis, along with existing investors Thrive Capital and Index Ventures.
Aug. 25, 2021 – Trove Raises $77.5 Million in Series D
Trove Recommerce, which partners with brands to create online platforms for them to sell used goods, raised $77.5 million in an August 25 Series D round, led by G2 Venture Partners.
Jun. 24, 2021 – GOAT Raises $195 Million in Series F Funding Round
Online sneaker and apparel marketplace GOAT Group has raised $195 million in a new funding round, which has “more than doubled its valuation to $3.7 billion.” The round for the 6-year-old Los Angeles-based company, which boasts some 30 million customers across 170 countries, was led by Park West Asset Management, funds and accounts advised by T. Rowe Price Associates, Inc., Franklin Templeton, Adage Capital Management and Ulysses Management.
Jun. 2, 2021 – Etsy Acquires Depop for $1.62 Billion
May 26, 2021 – Treet Raises $2.8 Million in Seed Round
Reseller Treet – which powers brands to set up their own resale sites where buyers and sellers can list and find items – raised $2.8 million in a May 26 seed round with participation from Bling Capital, Matchstick Ventures, Techstars, BAM Ventures, BBG Ventures, Green Meadow, Interlace Ventures, V1.VC and Alante Capital.
May 12, 2021 – Vinted Raises $303 Million in Series F Round
Vinted raised 250 million euros ($303 million) in a May 12 Series F round, the Vilnius, Lithuania-founded online resale platform announced. According to a release from Vinted, which got its start in 2008 and boasts some 45 million users, the company “operates in over 10 markets, and has become the largest online C2C marketplace in second-hand fashion across Europe,” and will use the funding from the latest EQT Growth-led round – one that values the resale upstart at $4.3 billion – to expand its operations in Europe and “new geographies,” ramp up its hiring, and improve user experience.
Apr. 8, 2021 – StockX Raises $195 Million in Secondary Market Round
StockX announced the conclusion of a $195 million secondary tender offering on April 8, as well as an additional $60 million in Series E-1 primary shares, boosting the streetwear and sneaker platform’s December 2020 valuation of $2.8 billion by 35 percent, and bringing its total funding to $690 million.
Mar. 1, 2021 – Vestiaire Raises $216 Million in Series H
Kering and American investment firm Tiger Global Management led a March 1 Series H funding round that saw secondhand marketplace Vestiaire Collective bring in $216 million in funding, along with existing investors, including its CEO Max Bittner, Vogue’s parent company Condé Nast, and the Eurazeo Group, among others. The deal gives Paris-based Vestiaire “unicorn status” – i.e., puts a $1 billion-plus value on the privately-held company – and “ideally positions it for its next cycle of accelerated growth.”
Feb. 26, 2021 – Reflaunt Raises $2.7 Million in Pre-Series A
Second-hand fashion platform Reflaunt raised $2.7 million dollars in a pre-Series A funding round from investors including former Jimmy Choo CEO Pierre Denis and Ganni founder and former CEO Nicolaj Reffstrup, among others, with an aim to “offer a variety of resale models to more leading global brands” and to allow consumers to resell pre-owned products “directly on the brands’ individual e-commerce platforms.”
Jan. 19, 2021 – GOAT Welcomes “Strategic Investment” from Groupe Artemis
GOAT Group announced on January 19 that it would welcome a “strategic investment” from Groupe Artemis – the controlling shareholder of Kering – as it “continues its expansion in fashion apparel and new categories.” The undisclosed Artemis investment comes on the heels of a Series E round of $100 million announced in September 2020, which valued the company at $1.75 billion.
“The latest season of couture offers elaborate creations, including micro-studded jeans that shimmer from waist to toe and a metallic dress that is as fine as jewelry,” the Wall Street Journal stated this weekend, reflecting on the wares of Chanel, Armani Privé, Maison Margiela, Fendi, and co. But look beyond rhinestone-encrusted jeans and cowboy boots from John Galliano’s most recent Maison Margiela Artisanal collection and the “thin, shiny feather-like rhodoïd fringe” material that Alexandre Vauthier used to construct pants for Fall 2022 couture, and you will see that there is another type of “extra flourish” coming from luxury brands: Warranties and repair services.
Bottega Veneta, for one, made headlines recently in connection with its “Certificate of Craft” initiative, which sees it offering a lifetime warranty for Bottega handbags purchased from the brand and its authorized retailers beginning this month. As part of the warranty, the Kering-owned company will proffer complimentary refresh and repair services for a growing list of bag styles. Speaking about the new endeavor, Bottega Veneta CEO Leo Rongone said that it is “born out of a desire to offer our clients a superior service of long-term preservation of their products,” noting that in conjunction with its “focus on responsible growth,” Bottega wants to “maintain products in use for longer, reducing the need for replacement.”
Rising Repair Initiatives
The Italian luxury brand is not the only one that is readily marketing repair services. As we first reported last year, Chanel has been putting its weight behind similar efforts, as primarily indicated by a budding number of trademark applications filed for its name and other branding – from “Ready to Care” to “Chanel & Moi” – for use on services, such as the “cleaning of clothing, textiles, shoes and leather goods.” Chanel has since introduced its “Warranty” initiative, in furtherance of which it “pledges an exclusive 5-year guarantee for all CHANEL handbags and CHANEL wallets on chain” acquired from its boutiques beginning in April 2021.
Reflecting on the influx of warranties in the upper-echelon of the luxury segment, Jefferies analysts Flavio Cereda and Kathryn Parker recently revealed that behind Bottega (and Brunello Cucinelli, which also provides a lifetime of free repairs for its products), “Chanel offers the second most comprehensive repair service with [its] 5-year warranty,” while Gucci provides a 2-year warranty for its handbags.
Cereda and Parker state that Louis Vuitton’s “bags do not have a warranty.” However, the brand “emphasized efforts to offer repair services for its products” this summer, and more recently, stated that it repairs some 500,000 bags per year, some of which are facilitated by its “e-service” in the U.S. Still yet, the Jefferies analysts point to Hermès, which “does not offer free repairs and refurbishment,” but carries out “Hermès Spa” services for its handbags at “a cost dependent upon the level of restoration needed.”
The brands that are rolling out warranties and related initiatives join a long list of watchmakers, such as Rolex, Audemars Piguet, Patek Philippe, LVMH-owned Tag Heuer, and Richemont’s Vacheron Constantin, just to name a few, and other luxury brands that have long – but often quietly – tendered warranties, and corresponding maintenance and repair services to buyers.
Marketing & Price Justification
The growing emphasis on product warranties and lifespan-extending services by luxury brands – which have traditionally been viewed as potential impediments to the volume-based model maintained by most brands, including ones in the “luxury” sphere – is being driven by a confluence of critical factors. For one thing, these increasingly-heavily-marketed repair services enable brands to tout sustainability credentials in the face of rising consumer concern about the environment. “Being environmentally virtuous” – including when it comes to fashion consumption – “has transitioned from niche consideration to central parameter of desire,” Luke Leitch wrote for Vogue last year in a nod to the growing adoption of repair services by luxury players.
At the same time, brands know that the messaging behind these ventures is particularly important when it comes to younger consumers, who are climate-conscious and who will, one day, be their biggest spenders. Repair services “have become far more interesting to young customers – even those who can afford something new,” according to McKinsey analyst Anita Balchandani. Hence, the push by buzzy companies like Bottega Veneta, which have found favor among millennials, to promote circularity by way of product longevity programs.
In addition to bringing about benefits on the marketing front and helping brands to attract new customers, these initiatives enable brands to engender goodwill and strengthen their bonds with existing clients, as well.
Beyond that, luxury brands’ warranties/repair benefits – which often apply only to new products that are purchased from the brands and/or their authorized retailers – serve as a way for companies to entice consumers to purchase products through authorized channels as opposed to the secondary market. In turn, this is a way for control-happy luxury giants to further hold on to – or in some cases, regain – as much control as possible over the market for their products. This puts the onus on brands to find ways to attract and sell to consumers directly, including by offering up benefits that unauthorized retailers and resellers cannot.
Still yet, there is the undeniable element of pricing. It is almost certainly not a coincidence that a number of the newly-introduced warranty/maintenance initiatives come as brands across the board have been aggressively raising their prices. By advertising these services, luxury brands like Chanel, for instance, are essentially providing consumers with additional value, potentially with the aim of softening the blow of soaring price tags.
The Rising Role of Web3
The increasing offering of warranties and repairs by brands will likely bring more of the practical aspects of web3 into the mix (this sphere is not just limited to expensive blockchain-linked MetaBirkins or Bored Ape jpegs, after all), with such efforts potentially pairing neatly with companies’ heightening adoption of blockchain technologies. It is not difficult to imagine brands opting to immutably record ownership and warranty information, as well as product repair histories, via blockchain-hosted tokens or QR codes.
We are seeing these endeavors come by way of luxury watch brands and auto manufacturers, alike. Breitling, for instance, was an early mover in this space, introducing blockchain-based product passports for its watches, and enabling customers to not only verify authenticity of their watches and transfer ownership of them upon resale, but to register repairs “with a timestamp on the blockchain.” Additionally, the watch company stated back in 2020 that it planned to roll out “upcoming insurance services and resale warranties enhance” with ties to the product passports. Panerai has also exploring this space, revealing early this year that “in time, every Panerai watch will be issued a Digital Passport, as a service to protect its valuable, singular identity, maintain an open line of communication with the brand and unlock benefits and services.”
More recently, Italian automaker Alfa Romeo announced that each of its new Tonale SUVs will come equipped with a blockchain-based certificate that tracks the car’s maintenance record. The Stellantis-owned company said in February that the “blockchain-guaranteed certification of the car’s life record” will provide a “confidential and non-modifiable record of the main stages in the life of [each] individual vehicle [that] can be used as a guarantee of the car’s overall status,” creating “a positive impact on its residual value.”
It will be interesting to see how brands will use blockchain tech hand-in-hand with their budding interest in repairs. Rolex seems like it may be eager to take part, filing a new trademark application with the U.S. Patent and Trademark to register its famous name for use across an array of goods and services, including “watches and chronometric instruments with digital codes, labels, tags and digital chips” (in Class 14). Not long before that, Hermès filed an application in something of the same vein, with an emphasis on services, such as “blockchain technology for representing a collectible item,” among other things.