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Vestiaire Collective Targets $1.1 Million in Crowdfunding

Vestiaire Collective Targets $1.1 Million in Crowdfunding

European pre-owned fashion platform Vestiaire Collective launched a crowdfunding campaign to raise at least 1 million euros (about $1.1 million) from individual investors.

The crowdfunding campaign, which will be advertised on Vestiaire’s website and mobile app, opens Tuesday (Jan. 23) and is being facilitated through United Kingdom-based platform Crowdcube, with a subscription phase starting Feb. 6, Reuters reported Tuesday.

Individuals over the age of 18 in Europe and the U.K. are eligible to participate, with shares priced at 1.78 euros (about $1.94) each, valuing Vestiaire Collective at 1.1 billion euros (about $1.2 billion), the report said. The valuation is consistent with a previous funding round led by private equity firm Eurazeo, its largest shareholder, which valued the firm at 1.4 billion euros (about $1.5 billion) in mid-2022.

The company is also backed by global luxury group Kering, the owner of high-end fashion brand Gucci.

The move to engage individual investors through crowdfunding is part of the company’s broader strategy to involve the community in its long-term growth, Vestiaire Collective CEO Maximilian Bittner said, per the report.

“The goal is really to bring our most loyal customers into our shareholder base,” he said in the report. “We really see this as a marketing effort to connect with our community.”

Founded in Paris in 2009, the secondhand fashion marketplace, which aims to achieve profitability by the end of this year and potentially go public in 2025, saw revenue grow 25% in 2023, according to the report.

However, concerns about a potential downward spiral in pricing have emerged due to a slowdown in luxury spending and an excess of holiday season inventory, threatening to cheapen the prestigious image of luxury and couture brands.

Credit card data showed a 15% year-over-year drop in luxury spending in the United States in November, following a 14% decline in October. Additionally, there was a year-over-year decrease in luxury fashion purchases in November by nearly 10%, following an 11.4% decline in October.

As a result, retailers found themselves with excess inventory going into the holidays, having placed their purchase orders before the luxury market had a cooling-off phase after the post-pandemic spike in demand.

To reduce the mounting inventory of unsold stock, luxury brands are discreetly exploring alternative avenues such as off-price outlets and other undisclosed channels to prevent any appearance of desperation.

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