Nike has asked a New York federal court to allow it to amend the complaint that it filed against StockX early this year over the resale marketplace’s allegedly infringing “Vault” NFTs, asserting that since it lodged that complaint, “additional facts transpired or were discovered that are highly relevant to [its] claims against StockX.” In addition to entering into the non-fungible token (“NFT”) market since the filing of its suit by way of a venture with its RTFKT brand, the Beaverton, Oregon-based sportswear behemoth claims that it has purchased a number of pairs of counterfeit “Nike” sneakers from the StockX platform, and all the while, StockX has altered its terms for the “Vault” NFTs, giving rise to the need for Nike to make relevant amendments to its original filing. 

In the 25-page memo of law in support that it filed with the U.S. District Court for the Southern District of New York on Tuesday, counsel for Nike seeks leave to amend the complaint that it filed against StockX in February, in which it accused the fashion and footwear resale platform of trademark infringement, trademark dilution, and unfair competition. Since it lodged that complaint, Nike claims that there are “multiple facts that occurred or were discovered” that are directly related to its claims against StockX. 

Primarily, Nike argues that “StockX has made a series of modifications to its representations surrounding [the] Vault NFTs” at the center of the case. For example, Nike states that after it “shined a spotlight on several problematic and deceptive terms governing the infringing Nike-branded NFTs, StockX deleted and/or replaced those terms.” StockX also allegedly “modified Vault NFT marketing that, e.g., promised owners of the infringing Nike-branded NFTs exclusive StockX benefits.” While these changes “do nothing to excuse StockX’s ongoing infringement of Nike’s marks or to resolve its past infringement and, indeed, by the time those modifications were made, StockX had already offered for sale, sold, and/or released into the stream of commerce all of the infringing Nike-branded NFTs,” Nike argues that StockX’s “revisionary conduct is, nonetheless, relevant to [its] claims,” and thus, should be included in an amended complaint. 

Beyond that, Nike says that its own position has changed since it filed suit, as it has since entered the NFT market, a fact that is critical to the likelihood of confusion analysis. “Two key factors in the likelihood of confusion analysis are ‘proximity of the products and their competitiveness with one another’ and evidence that the senior user may ‘bridge the gap’ by developing a product for sale in the market of the alleged infringer’s product,” Nike asserts. “Sure enough, after Nike’s drop of these NFTs, additional actual confusion between the parties’ occurred because of StockX’s infringing Nike-branded NFTs.”

Finally, Nike proposes supplementing its pleadings with additional allegations – and two addition causes of action – centering on its alleged purchase of “four confirmed pairs of counterfeit ‘Nike’ shoes” from the StockX platform. Despite “StockX’s numerous guarantees of authenticity,” and its argument that each of the Vault NFTs functions as “a ‘claim ticket’ to a pair of Nike shoes that StockX authenticated using its ‘proprietary, multi-step authentication process,’” Nike claims that it purchased the counterfeit sneakers “within a two-month period on StockX’s platform.” 

“At least one pair of those counterfeit shoes are the same style as one of the infringing Nike-branded Vault NFTs,” Nike asserts. 

Nike StockX

In addition to seeking to include factual allegations about how StockX is “actively and directly selling counterfeit goods on its platform,” Nike says that it is looking to add counterfeiting and false advertising causes of action to its original five causes of action. Nike claims that it has a claim for false advertising in light of StockX’s practice of “guaranteeing [its] sales as ‘100% Verified Authentic’ based on its ‘proprietary’ authentication process when they are not,” and give that “those statements are material to [consumers’] purchasing decisions.”  

As support for proposed inclusion of counterfeiting and false advertising claims, Nike asserts that “a court in this District recently denied a Rule 12(b)(6) motion to dismiss nearly identical causes of action for counterfeiting and false advertising.” The case that Nike is referencing is Chanel v. The RealReal (“TRR”), in which the court held that “Chanel has adequately averred that its own investigation revealed that TRR marketed and sold counterfeit Chanel products, and Chanel has also alleged that TRR’s own customers have complained about the receipt of counterfeit merchandise.” 

In the case at hand, just as Chanel asserts in its case against TRR, Nike argues that it sets out “plausible claims for counterfeiting and false advertising because the proposed [amended complaint] sufficiently alleges that StockX has been and is currently dealing in counterfeit Nike goods, which renders false and/or misleading StockX’s ‘100% Verified Authentic’ claims and its claims about the ‘proprietary multi-step verification process’ it employs to authenticate goods.” 

Nike also contends that it “sufficiently alleges that StockX is knowingly deceiving consumers with these false and/or misleading statements about the authenticity of the Nike goods for sale on its platform, continuing to engage in such improper and unlawful business practices to attract consumers to its platform and induce consumers to purchase supposedly genuine Nike goods and purchase and trade the infringing Nike-branded Vault NFTs.” And still yet, Nike alleges that “the continued sale of counterfeit Nike goods on StockX’s platform and StockX’s false and/or misleading claims about its authentication process has caused and is causing Nike injury as a result of, inter alia, harm to reputation, diverted sales, consumer confusion, dilution, and tarnishment of its valuable trademarks.” 

For the foregoing reasons, Nike requests the Court grant it leave to file a first amended complaint. 

In a statement in response to Nike’s filing, a spokesman for StockX stated on Wednesday, “We take customer protection extremely seriously, and we’ve invested millions to fight the proliferation of counterfeit products that virtually every global marketplace faces today. Nike’s latest filing is not only baseless but also is curious given that their own brand protection team has communicated confidence in our authentication program, and that hundreds of Nike employees – including current senior executives – use StockX to buy and sell products. This latest tactic amounts to nothing more than a panicked and desperate attempt to resuscitate its losing legal case against our innovative Vault NFT program that revolutionizes the way that consumers can buy, store, and sell collectibles safely, efficiently, and sustainably. Nike’s challenge has no merit and clearly demonstrates their lack of understanding of the modern Marketplace.”

The case is Nike, Inc. v. StockX LLC, 1:22-cv-00983 (SDNY).

Luxury goods are slated to start flowing back into Russia despite moves by most non-native brands to pull out of the market in the wake of the deadly attacks on Ukraine led by Vladimir Putin. A 25-page list of exempted brands/products has been released by Russia’s Industry and Trade Ministry, allowing for parallel imports of luxury cars from Bentley, Ferrari, and Rolls-Royce, among others, consumer electronics from Apple and Dyson, cosmetics, and fashion and leather goods in furtherance of what Russian authorities say is an attempt to “defend the interests of domestic consumers for products of those foreign companies that left the Russian market under the sanctions regime imposed by ‘unfriendly’ countries.” 

First released by the Ministry of Industry and Trade of the Russian Federation last month, the order on parallel imports or “grey market goods” (i.e., genuine branded goods obtained from one market that are subsequently imported into another market and sold there without the consent of the trademark holder) provides that Article 1359 (section 6) and Article 1487 of the Russian Civil Code “are not applied” to the approved list of goods, “provided the specified goods were put into circulation outside Russia by the right holders and with their consent.” In accordance with the principle of trademark exhaustion – or the first sale doctrine, as it is known in the U.S., “the products must be legally put into circulation [in] the country of import,” the trade ministry stated.

The Russian ministry distinguished the new scheme from outright counterfeiting (namely, the unauthorized use of a mark that is identical with, or substantially indistinguishable from, another’s registered trademark), asserting in a statement late last week that allowing for “parallel imports does not mean permission to import and circulate counterfeit goods in Russia.” 

Fashion and other luxury brands may be hit particularly hard when it comes to the impending push to get parallel imports into Russia. While the official list of allowable products specifically indicates brands of electronics and automobiles, among other categories of goods, that may be imported into Russia without the threat of trademark infringement ramifications, it does not set out a list of fashion/luxury goods purveyors whose goods may be legally imported into Russia. “Clothing, footwear, and leather goods are listed without any specific brand indications,” Maksym Popov, a partner at Mentors Law Firm in Ukraine, tells TFL. This means that “everything within these categories of goods is subject to parallel imports,” which could serve to flood the market with a barrage of luxury goods in the not-too-distant future. (Not the only categories that lack brand specifications, the Ministry of Industry and Trade’s list also allows for the unfettered import of spare parts for certain machinery, for example.)

The situation is likely to be a “complicated” one for brands, Popov says, noting that trademark holders “will not have the ability to control the importation of goods into Russia through distributors,” as has been an issue for brands in other countries, including China, which routinely sees a significant supply of grey market goods coming by way of multi-brand stores in places like Italy and landing on the mainland after passing through agents in Hong Kong.

As an extreme example, he says, “We may even see Louis Vuitton and Chanel bags sold in multi-brand boutiques.”

Given the meticulous control and purely direct-to-consumer distribution model that is exercised by Chanel, Louis Vuitton, and other similarly situated luxury titans, it seems unlikely that these brands will be among the most heavily impacted by the newly-implemented grey market scheme in Russia. (Chanel, after all, made headlines last month for reportedly implementing a process in its own stores outside of Russia “to ask clients for whom we do not know the main residency to confirm that the items they are purchasing will not be used in Russia,” a move that has spurred furor from Russian shoppers in markets, such as France, Italy, China, and Dubai.) Chances are, brands that boast a network of authorized third-party distributors will find their wares are more readily being imported into the Russian market without their authorization.

The order that serves to relax the law on parallel imports comes after the country’s Ministry of Industry and Trade was authorized to compile a list of goods for which parallel imports would be allowed, which was published – and went into effect – on April 19. That list followed from a previous revelation from the ministry in March when its “Priority Action Plan for Ensuring the Development of the Russian Economy in the Conditions of External Sanctions Pressure” revealed that an influx of grey market goods would likely follow from Western brands’ exodus from the Russian market. In the Priority Action Plan, which surfaced in early March, the Ministry appeared to propose suspending liability for parties engaging in parallel imports for certain – but then undefined – “groups of goods,” thereby, potentially opening the door for a greater share of out-of-channel products to flow into Russia, which maintains some restrictions on the sale of grey market goods. 

As TFL first reported at the time, depending on how long the effects of Russian-focused sanctions implemented by the U.S., European Union, and others, last, which ban the import of luxury goods into Russia (and chances are this is not a temporary situation), the luxury goods ecosystem in Russia may begin to mirror that of other markets that are readily flooded with grey market goods. In the event that companies’ self-operated stores do not return in a timely manner, certain brands may opt to look the other way, enabling multi-brand stores in other markets to order excess goods and ship them to Moscow with the help of parallel importers, and enabling the brands to add those excess sales to their balance sheets.

Brands at the top of the luxury totem pole are not expected to engage in such grey market-feeding activity; their recent revenue reports indicate that they are not suffering as a result of a loss of sales in Russia, which accounts for no more than 4 percent of their annual sales. However, that may not be the case for other brands that traditionally maintain larger footprints in Russia and their distributors, which have proven to be far less immune to the pull-out of the Russian market. (Reuters reported recently that in March, adidas, for example, “warned of a hit to sales from closing in Russia, without giving an estimate. It operates 500 stores in the country, a quarter of its total.” Around the same time, toy maker Hasbro warned that its revenues could hit of approximately $100 million this year due to its decision to halt its sales in Russia.)

“Usually, official distributors are interested in fighting illegally imported goods,” Popov says. “But now that anyone can [indirectly] import goods into the country, will they want to fight it?” 

An artist resale royalty, or droit de suite as it is often called in Europe, provides artists with an opportunity to benefit from the increased value of their works over time by granting them a percentage of the proceeds from the resale of their original works of art. The royalty originated in France in the 1920s and is in general practice throughout Europe, but is not part of United States copyright law. Instead, under the first sale doctrine, the lawful owner of a copyrighted work may “sell or otherwise dispose of the possession of that copy” and “display that copy publicly” all without the author’s permission. Thus, a purchased painting, sculpture, or another piece of art may be treated like a house, car, or any other possession.

Much of the value of non-fungible tokens (“NFTs”) tied to art for minters and artists who digitize and list their works lies in proceeds from resales of those NFTs as values rise. Determining whether the resale right, the first sale doctrine, a combination of the two, or some other legal concept should apply when it comes to NFTs will have a significant effect on the industry’s economic vitality. 

A Deeper Dive into Resale Rights and NFTs

The resale right affords artists protection against their works being sold too cheaply. It works by giving the creator a slice of the proceeds each time the work is resold and allowing them to participate along with collectors and speculators in the items’ appreciation. The right of resale originated during the explosion of cultural creativity known as the années folles (crazy times) that engulfed France in the 1920s, and it is established policy throughout Europe. Current U.S. copyright law, however, does not recognize the resale right – although numerous attempts have been made to incorporate it into federal legislation. When artists sell NFTs of their work, a typical sales agreement would include a mechanism that allows them to receive royalties not only on the original sale but also on subsequent resales thereafter. Blockchain smart contracts track payment transactions and automatically distribute royalties to the artists. 

The resale right comes into play for video game companies, for example, because NFTs are increasingly used as in-game assets that players can earn through gameplay, trades, and/or third-party sales. Common practice is for game companies to create NFT assets as work-for-hire or work products and retain the resale rights for themselves, earning ongoing revenues for rare and high-utility items. However, game companies that purchase rights to creative assets can arrange for the artists to receive passive income as players sell the related skins, in-game accessories, virtual real estate, and collector’s cards over the course of gameplay or trade on secondary markets. But since the U.S. copyright law does not recognize resale rights, it is unclear whether any provision regarding royalties under NFTs’ smart contracts would apply to video game companies operating in the U.S.

A Second Look at First Sale

U.S. copyright law does not recognize resale rights but instead stipulates that once an original copyright-protected work of authorship is sold, the buyer and all subsequent purchasers are free to resell that work without compensating the original artist or author. This first sale principle is the exact opposite of the resale right. 

However, successive judicial decisions have held that the first sale doctrine does not apply to digital works. For example, in Capitol Records LLC v.  ReDigi Inc., the U.S. Court of Appeals for the Second Circuit held that the first sale doctrine does not apply to digital music files because the resale would require making an unauthorized copy of the digital music file that would infringe upon the copyright owner’s reproduction right. Similarly, in Disney Enterprises Inc. v. Redbox Automated Retail LLC, the U.S. District Court for Central California held that the first sale doctrine did not apply to digital download codes because the sale of movie download codes essentially granted the ability to create physical copies at some point in the future rather than a particular, fixed copy of a copyrighted work.

Based on the existing precedent, it would seem that the first sale doctrine does not apply to NFTs that are tied to digital objects, such as audio files and digital images. In other words, the right to sell or distribute the digital version of a work, be it a drawing, digital music file, or photograph, belongs exclusively to the copyright owner. However, it is generally in the copyright owner’s interest to allow the resale because a limited form of contracting might be possible: while US copyright law does not recognize the resale right, the NFT sales agreement can be written such that the seller is obligated to pay royalties to the copyright owner if the in-game asset is sold to a third party. Moreover, these provisions can be executed by smart contracts to ensure they are accurately and consistently applied every time that a real occurs. In these cases, it is in the copyright owners’ interest to allow resales, as they will receive resale royalties under the terms of NFTs’ sales agreements. 

Further, it is unlikely that the first sale doctrine will apply to cases where a lawful digital artwork owner attempts the unauthorized minting of an in-game digital asset or NFT. Since “ownership” of digital artwork is more akin to possessing a license to access the work than actual ownership of a particular copy, the right to convert the artwork into an NFT resides solely with the copyright owner. In cases where the lawful owner of a physical artwork attempts to mint an NFT without the consent of the copyright owner, the outcome will likely be the same.

The surge in popularity and usage of digital assets, such as NFTs, and the murkiness surrounding the application of the first sale doctrine may force courts to draft a first sale doctrine that specifically addresses these use cases. In the meantime, the first sale doctrine is unlikely to be applicable to the sale of NFTs. This is because when a buyer purchases an in-game NFT, they would acquire a link to a digital version of the asset the NFT represents. This acts as an option to create a copy of the digital work, and U.S. courts currently do not acknowledge a first sale doctrine for digital works. Nevertheless, a limited form of contracting of royalty provisions in the NFT sales agreement might be possible. It is best to consult an attorney specializing in copyright, contracts, and NFTs for guidance on this complex issue.

David B. Hoppe is the founder and managing partner of Gamma Law, and a recognized authority on emerging legal issues in high-growth media/technology sectors, including video games and esports, blockchain and digital assets,VR/AR/XR, and digital media/entertainment.

A growing number of lawsuits over non-fungible tokens (“NFTs”), including the case that Nike filed against StockX over its use of Nike trademarks on NFTs tied to hot-selling sneakers, are beginning to test the nature of these novel digital assets. In the Nike case, which was filed in a New York federal court in February, the distinction between virtual products and otherwise value-less digital receipts is the critical one when it comes to identifying what StockX’s Vault NFTs are. Nike has argued that the NFTs are “virtual products, i.e., digital collectibles, created and first offered for sale by StockX, and available direct to consumers for purchase and trade on the StockX website and StockX app.” Meanwhile, StockX has argued that its Vault NFTs “are absolutely not ‘virtual products’ or digital sneakers,” and rather, serve as a “claim ticket, or a ‘key’ to access ownership of the underlying stored item.” 

While the lawsuit raises some novel questions that should shed light – and provide guidance – as an increasing number of brands look for ways to adapt their existing models for a Web3-focused world, Nike’s trademark infringement and dilution, and unfair competition lawsuit over StockX’s NFTs is also striking because it carries with it into the virtual world many of the same concerns that brands routinely argue in lawsuits over tangible goods in the “real” world, including issues of control, competition, and authentication, among others. 

One of the most immediate qualms that Nike has with the Vault NFTs that are being offered by StockX – which has allegedly used Nike’s famous marks to “garner attention, drive sales, and confuse consumers into believing that Nike collaborated with [it]” for the NFT venture – appears to be one of control. Specifically, StockX is offering up the Nike trademark-bearing NFTs, while simultaneously robbing Nike of the ability to exert control over the sale and conditions of those NFTs.

Nike’s problem is reflected in no shortage of language in its complaint, including its claim that “despite StockX’s prominent use of Nike’s trademarks and products in connection with the Vault NFTs, Nike has no control over the quality of the Vault NFTs whatsoever.” The Beaverton, Oregon-based titan also asserts that it “has no say in how many Vault NFTs bearing its trademarks are released, where the Vault NFTs are released and traded, when the Vault NFTs are released, how the Vault NFTs are released, traded, or redeemed, and at what price the Vault NFTs are sold and traded.” Clearly, these are pain points for Nike – and (maybe) rightfully so. 

(While brands are generally forced to give up the right the control if/how their products are resold once they release them into the market (this is the tenet at the heart of the first sale doctrine), there are limits in instances where the products being resold – or the conditions in which the products are being resold – are “materially different” than they initially were. Nike has already suggested that is the case here given that StockX is bundling the sneakers (the original products that Nike released into the market) with NFTs, the latter of which “may take a variety of forms, and the holders of NFTs may be entitled to obtain certain products, benefits or engage in certain experiences, such as unlocking a prize or entry into an exclusive sale,” according to StockX’s terms.)

The idea that brands want to carefully control the conditions in which their products are sold is a well-established one. A brand’s ability to control how/where its products are sold is “critical to its ability to preserve brand equity, maximize profitable e-commerce channel growth, and prevent damaging e-commerce conflicts with its brick-and-mortar business,” among other things, according to Vorys partner Daren Garcia. As such, this is an issue that has come up in a variety of cases in recent years, in particular, as brands look to regain some of the control they that have ceded as a result of the rise of various sales/distribution channels, including the burgeoning resale market

One need not look further than some of the lawsuits that Chanel has waged against resale entities for an indication that the ability to control how and where their products are sold is something that is important to luxury brands – and even more mass market brands like Nike, which is in the midst of prioritizing its direct-to-consumer distribution following decades of relying heavily on a robust wholesale network. 

Chanel demonstrated the concerns of many similarly-situated brands on this front in a since-settled case that it waged against Crepslocker, in which it argued that the British reseller was running afoul of the law by offering up Chanel goods in conditions that were damaging to its wildly valuable brand image. This included shipping Chanel products in packaging that diverged from Chanel’s standards; offering up products in accordance with terms that differ from those observed by Chanel (Crepslocker’s no-return policy and its requirement that consumers pay via PayPal (and not credit card) were cited by Chanel as examples of this); and using Chanel’s trademarks alongside “sportswear and other brands, which do not have similar associations of luxury, prestige, exclusivity, and longevity to those enjoyed by [Chanel].” 

Such quests for control – and the arguments that come along with them – do not appear to be a million miles away from Nike’s claims in the StockX case, which seem to stem largely from its inability to control the nature of the Vault NFTs, including the “murky terms of purchase and ownership,” which have allegedly “already led to public criticism of StockX and allegations that [its] Vault NFTs are a scam.” (StockX has, of course, disputed this, pointing to the successful completion of 2,853 Vault NFT transactions since the launch of the NFT venture in mid-January.)

At the same time, the critical element of authentication – and the advertising of “authenticated” products – often comes hand-in-hand with brands’ pushes for control, and it has come up in Nike v. StockX, with the sportswear behemoth taking issue with the fact that that StockX “touts each Vault NFTs as ‘100% Authentic.’” According to Nike, StockX is making use of such declarations in order to “explicitly mislead consumers that Nike has authorized, approved, sponsored, and/or endorsed StockX’s Vault NFTs,” when no such affiliation or authorization is at play. 

Again, this is not a novel issue. In its case against The RealReal, for instance, Chanel has pushed back against the reseller’s widespread promises of authenticity. Chanel has argued that The RealReal’s alleged authentication experts are “not properly qualified or trained in authentication of Chanel products to support [TRR’s] claims as to the genuineness of the products it resells.” And beyond that, Chanel has claimed that The RealReal has no business guaranteeing authenticity of Chanel goods, as “only products purchased directly from Chanel and its authorized retailers can be certain to be” – and thus, be advertised as – “genuine and authentic.”

In one more thing worth flagging, the recurring “real” world issue of marketplace operator liability is likely to come up as Nike’s lawsuit over the Vault NFTs proceeds (and potentially future cases against NFT marketplaces like OpenSea), with the Swoosh already contending that “unlike the eBay model, StockX is an active intermediary for each transaction—the seller ships the item to StockX, StockX receives and purportedly verifies the item’s authenticity, StockX then ships the item to the buyer with a StockX-branded verification badge, and StockX pays the seller (less its transaction fees).” As such, Nike may be setting the stage for an argument, should StockX seek to shield itself from liability on the basis that it is merely a marketplace operator and not a seller, which has been the go-to defense for the likes of Amazon

THE BOTTOM LINE: The growing number of trademark lawsuits that center on NFTs is giving rise to an array of novel questions, including ones that might require courts to make precedent-setting determinations about the very nature and purpose of NFTs (digital receipts versus virtual products) and that could have a significant effect on things like the likelihood of confusion analysis. All the while, we should not overlook the fact that these cases still largely revolve around well-established “real” world, brand-centric issues, which these cases are bringing into the virtual realm. 

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 … 

April 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.

March 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.”

December 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. 

December 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.”

November 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.”

November 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.”

November 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.

October 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, the acquisition “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.”

September 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.

September 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. 

September 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. 

August 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. 

June 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.

June 2021 – Etsy Acquires Depop for $1.62 Billion

In a quest to target Gen-Z consumers (i.e., those born between the late 1990s and the early 2010s), who are driving both social shopping and largescale pushes in sustainability, Etsy announced that it will acquire burgeoning British shopping app Depop for $1.62 billion. 

May 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 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. 

April 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.

March 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.” 

February 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.” 

January 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.