In an attempt to capitalize on a growing trend in retail involving the buying and selling of secondhand clothing and accessories, Neiman Marcus has acquired a minority stake in Fashionphile, an online company that sells pre-owned designer handbags and other similar products, according to a report in The Wall Street Journal.
And another resale company with which Neiman Marcus used to have a relationship, The RealReal, is preparing for an initial public offering (IPO). H&M Group also recently started letting shoppers in Sweden buy and sell previously used items.
“Resale is at the nexus of a lot of trends,” said Oliver Chen, a senior equity analyst at Cowen. “You have a new generation who is interested in sustainability and recycling. But most of all, shoppers just want bargains.”
Chen said consumers can purchase items for as much as 90 percent off an original price. The luxury retail market was worth $6 billion in 2018, and that is expected to rise. The overall resale market is growing even faster, and is expected to reach $51 billion by the year 2023. It is up $24 billion from last year.
Neiman Marcus’ previous relationship with The RealReal was discontinued in 2016, after a year. The company said at the time that it didn’t see the opportunity in the market.
“We are at a different point in time than we were three years ago,” said Neiman Marcus Chief Executive Geoffroy van Raemdonck. “The resale industry has grown faster and is now something our customers are much more engaged in.”
Neiman Marcus plans to open Fashionphile “salons” in some stores, where people can drop off used items like handbags and jewelry. Customers will receive cash for the items right away after they’ve been authenticated; van Raemdonck hopes it will help to expand the company’s reach.
“We want customers to think of us for all the categories we sell, but also those we don’t currently offer,” he said. “Recommerce is one of those areas.”