Tired of that $2,000 Ophidia bag? A new collaboration between Kering’s top brand Gucci and U.S. second-hand bling player The RealReal can help you sell it – and save the planet too. For every transaction the companies pledge to plant a tree in California and the Amazon, and reuse means items won’t end up in a landfill.
Great. But Gucci’s dip into vintage sales is probably about self-interest as well as environmental, social and governance concerns. Besides Covid-19, luxury players like $87 billion Kering face a looming threat from shoppers’ growing appetite for pre-worn bling. At 26 billion euros, the second-hand luxury market’s revenue is worth just 9% of the global sales for personal goods. But it has been growing faster, Bain data show. The pandemic and shoppers’ more urgent green awareness will only accelerate the trend.
For Kering’s boss François-Henri Pinault, embracing second-hand admittedly carries the risk of brand cannibalisation and counterfeiting. Chanel has accused The RealReal of selling fake goods. With the number of first-time luxury buyers still rising, second-hand bling may also seem a challenge that can for now be ignored. Chinese shoppers, the sector’s main constituency, have yet to warm to used goods.
But if Kering doesn’t do it, someone else will. And today’s vintage clothing lovers, usually young and wary of waste, may transition to newer items, especially if they’re produced sustainably. Winning insight on those potential clients is valuable.
Gucci’s pilot project with The RealReal, announced on Oct. 5, is little more than a start. The U.S. consignment company will retain ownership of the names and addresses of buyers and sellers. But Gucci will get some general stats on their profiles and appetite for vintage products.
Depending on how that goes, Pinault could go further. Kering could set up a vintage e-commerce business for its brand collection, which also includes Saint Laurent and Bottega Veneta. Or it could just buy The RealReal. At $1.2 billion, the U.S.-listed group – which trades some 32% below its mid-2019 initial public offering price – would be a small bite to swallow and its fragmented ownership could be willing to sell. Cartier owner Richemont took a similar step when it bought second-hand site Watchfinder in 2018. Kering could simply follow suit.