This time last week, Chloé and Vestiaire Collective announced a new partnership that will see them launch a Digital ID-integrated Resale System. The “innovative and pioneering tech feature,” which will be powered by EON and Trust-Place, will offer customers “full traceability of their items, with Instant Resale capability through Vestiaire’s platform,” the companies revealed. In addition to being a “first” in the luxury industry, the intro. of the resale-ready offerings appears to be one of the primary tangible examples of the Digital ID system that the Federico Marchetti-chaired Fashion Industry Taskforce – whose members range from executives at Chloé & Vestiaire to those at Armani, Zalando, Noon.com, and Moda Operandi – first announced back in 2021.
How it works: The initiative will see Chloé attach “Digital IDs” – which detail product info, allowing consumers to trace the product & its materials, and streamline the resale process with Vestiaire – to an array of its offerings beginning with its SS23 collection. According to Chloé, the ID program has 3 main purposes: “to ensure authenticity, traceability and to facilitate care and repair.” The ultimate aim, it seems, is “to change the fashion industry for a more sustainable future,” per Vestiaire CEO Maximilian Bittner.
Maybe more striking than the sustainability angle of the effort is the fact that this is the latest indicator of a brand taking a stronger hand in how the resale of its offerings will look/work, something that I’ve been keeping a close eye on. The draws of the resale market are obvious (even if the logistics of it are complicated) …
(1) It’s a potentially big revenue stream that many brands are missing out on;
(2) It’s a way to meet Qs/demands from investors, analysts & consumers, alike, about ESG (Hermès CEO Axel Dumas was asked about resale/repairs during the FY22 call today); and
(3) It’s a way for brands to exert greater control over how their products are marketed/sold (or better yet, resold) during the lifespan of these offerings. One need not look further than the plethora of brand-initiated upcycling & resale-specific lawsuits – which almost always include TM claims – to discern that this is an important issue for companies from Chanel to Nike.
The Bigger Picture: Looking beyond Chloé, Rolex is a good example of how brands may opt to approach the secondary market, with the Swiss watch titan announcing in Dec. that it was introducing a certified pre-owned program through which it will offer up pre-owned watches that have been “inspected, refurbished & that meet the company’s minimum standards,” the New York Times reported. Rolex’s move is expected to spur more action in the watch space, and chances are, we may be able expect similar efforts in other segments of the luxury market, as well. Stay tuned.
In litigation news …
– Hermès v. Rothschild: The court issued its final judgment in the MetaBirkins case this week.
– PRODUCTION TYPE SAS d/b/a PRODUCTION TYPE v. Nike: Graphic design/art direction co. Production Type is suing Nike for (c) infringement for allegedly using its KREUZ font without authorization/license.
– Inditex v. Zara Academy: Zara and its parent company Inditex are suing a beauty training academynamed Zara Academy for trademark infringement and dilution.
– Rogozinski v. Reddit: The founder of Reddit channel WallStreetBets, Jaime Rogozinski, is suing Reddit in a TM infringement and dilution & right of publicity suit, claiming that the platform “works to capture, take credit for & monetize other people’s creations.”
An Earnings Snapshot
Kering reported $21.8B in 2022 revenue, despite Gucci, Balenciaga woes. While all of the group’s brands “posted record revenues and contributed to higher operating income in 2022, these good performances were not uniformly up to our ambitions and potential.”
Hermès reported consolidated revenue amounted to $12.37B, up 29% at current exchange rates and 23% at constant exchange rates compared to 2021. Recurring operating income amounted to $5B (i.e., 40.5% of sales), while net profit (group share) reached $3.59B, representing net profitability of 29%. *No mention of the MetaBirkins case (or Hermès’ web3 efforts) during the Q&A portion of the earnings call unfortunately.
And in a bit of deal-making news this week … eBay Inc. acquired 3PM Shield LLC, a provider of advanced AI-based marketplace compliance solutions. San Jose, California-headquartered eBay said the acquisition will help to enhance its “world-class monitoring solutions with new technologies designed to prevent the sale of counterfeit items, unsafe products and illegal goods.”
– Virtual entertainment company Superplastic raised $20M in an extended Series A round led by the Amazon’s VC arm, “as it looks to expand its universe of digital characters.” Gucci-owner Kering, Google Ventures, Galaxy Digital, Sony Japan & Betaworks, among others, also participated in the round.