Vestiaire Collective, a leading fashion resale platform, has recently secured $64 million in funding from a successful round of financing. The round saw participation from both existing shareholders and new investors who recognize the potential of the luxury fashion resale market, which is predicted to grow post-COVID-19. The funds will be used for various strategic purposes, including transforming the fashion industry by offering a more sustainable alternative to fast fashion, exploring expansion into Japan and Korea with the help of new investor Korelya Capital, and expanding direct shipping services in the US.

Among the new investors are Korelya Capital, backed by Korean conglomerate Naver, Fidelity International, Vaultier7, a female-led consumer fund, and Cuir Invest, supported by the French Leather industry. Existing shareholders such as Eurazeo, Bpifrance, Vitruvian Partners, Condé Nast, Luxury Tech Fund, and Vestiaire Collective’s CEO, Max Bittner, also participated in the funding round.

Vestiaire Collective is committed to its eco-friendly approach and aligning its business model with changing consumer preferences. The company aims to reduce waste in the fashion industry and promote more sustainable practices by increasing the number of times garments are worn. The current economic and ecological crises caused by the pandemic have accelerated a shift in consumer mindset, with growing criticism of wasteful business models and a rising demand for purpose-driven brands.

The company believes that the pandemic will lead to increased online shopping, a focus on social values and communities, and heightened environmental concerns. It expects more consumers to turn to resale as a means of raising funds and finding value in their wardrobes, while a significant percentage of consumers plan to reduce their clothing consumption following the crisis.

Despite the challenges posed by the pandemic, Vestiaire Collective experienced a quick rebound in its business after a temporary setback. While specific figures were not disclosed, the company reported that deposits and orders have returned to pre-COVID-19 levels or even exceeded them. This resurgence highlights the strong demand for circular business models, both during and after the crisis, demonstrating the resilience and potential of the fashion resale industry.

Vestiaire Collective acknowledged the unique qualities of its new investors, particularly Vaultier7, which is part of the Vestiaire Collective community and will contribute to the company’s expansion plans. It also highlighted the extensive network of its investors, which will help tap into untapped potential in the luxury goods market and meet global buyer demand. The partnership with Korelya Capital is crucial for expansion into Japan and Korea, two major resale markets.

The new funding will accelerate Vestiaire Collective’s international growth beyond its current well-established markets. Currently, over 80% of the company’s transactions are cross-border. Importantly, the funding will drive further expansion in the US market and the development of its direct shipping model. The Direct Shipping service, already launched in Europe, has proven popular among customers, with over 50% of European orders being fulfilled through this service, which continues to grow rapidly. The company plans to launch the model in the US in early summer, followed by Asia later this year.

CEO Max Bittner remains positive about the future, believing that the current crisis will not only change where people shop but also how they shop. He emphasized the role of Vestiaire Collective in helping individuals maximize the use of their belongings and access fashion in a sustainable and conscious way, drawing from the company’s experience during the 2008 financial crisis.

Paul Degeuse of Korelya Capital echoed this sentiment, stating that consumption patterns are undergoing a profound structural evolution, and consumer-to-consumer platforms like Vestiaire Collective will play a crucial role in this transformation. He expressed enthusiasm about assisting the company in its expansion into Asia, which presents significant growth opportunities.

Vestiaire Collective’s successful funding round and the support from both existing and new investors demonstrate the promising future of luxury fashion resale. With its focus on sustainability, circularity, and meeting customer demand for ethical fashion choices, Vestiaire Collective is well-positioned to thrive in the changing retail landscape, both now and in the post-COVID-19 era.

Useful links:
1. Vestiaire Collective
2. Korelya Capital