Fashionphile has announced their partnership with Nieman Marcus!
UPDATED: The WSJ has a more in depth article on the announcement which is below.
“Resale is at the nexus of a lot of trends,” said Oliver Chen, a senior equity analyst at Cowen Inc.“You have a new generation who is interested in sustainability and recycling. But most of all, shoppers just want bargains.”
Mr. Chen says items in the secondary market sell for 30% to 90% less than the retail price of similar new items.
The U.S. luxury resale market totaled $6 billion in 2018, according to the consulting firm Bain & Co. But the overall U.S. recommerce market for clothing, accessories and footwear is far larger and growing fast. It is expected to reach $51 billion by 2023, up from $24 billion last year, according toGlobalData PLC, which prepared the research for a report published by online reseller ThredUP.
For Neiman Marcus, the investment in Fashionphile—the terms of which weren’t disclosed—is its second attempt at cracking the resale market. A partnership with The RealReal ended in 2016, a year after it launched. Chanel had expressed displeasure with the arrangement, according to people familiar with the situation. A Neiman Marcus executive previously told The Wall Street Journal that the partnership didn’t make sense at the time for the retailer or its customers.
“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.”
According to a survey conducted by Neiman Marcus, half its customers buy or sell preowned luxury goods.
Neiman Marcus plans to introduce Fashionphile “salons” to some of its stores, where customers can drop off handbags, jewelry and other accessories. Unlike some of its competitors that operate on a consignment model, Fashionphile pays sellers on the spot for their goods once they have been authenticated. To buy the secondhand goods, shoppers will have to visit Fashionphile’s website or one of its four boutiques.
Mr. van Raemdonck said the move is part of a strategy to increase Neiman Marcus’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.”
The hope is that once they receive the cash, shoppers will spend it buying new items at Neiman Marcus. The retailer plans to test different types of incentives to encourage customers to do that, but Mr. van Raemdonck declined to elaborate.
One challenge for luxury resellers has been opposition from brands, who worry that the secondary market degrades their image. Chanel is suing The RealReal for allegedly selling counterfeit products. The RealReal denies the claims.
Mr. van Raemdonck said Neiman Marcus won’t sell any secondhand products in its stores. By allowing customers to drop off their preowned goods, it is simply providing a service they want, he said.
A previous lawsuit by Chanel against Fashionphile was settled when the reseller agreed to change some wording on its website to make it clear it isn’t affiliated with Chanel, according to Ben Hemminger, Fashionphile’s chief executive.
“Chanel will one day recognize that resale isn’t going away,” said Sarah Davis, Fashionphile’s president, who started the company in 1999 after selling her own luxury handbags on eBay Inc.
“I always wanted to own things that I couldn’t afford, but I realized that I could afford them if I bought them secondhand,” Ms. Davis said.
Mr. Hemminger said Fashionphile is on track to sell $200 million worth of goods this year, up 50% from a year ago. That is smaller than RealReal and other luxury resellers such as Vestiaire Collective, according to analyst estimates. Unlike those players, Fashionphile only sells handbags and accessories, not clothing.
Fashionphile says the average bag sells for $1,400. It has sold trendy items such as Chanel handbags designed in collaboration with the musician Pharrell Williams as well as Chanel Classic Flap bags.
“Fashionphile shares with us the mentality that they will only sell the best products,” Mr. van Raemdonck said. “Other players might be bigger, but they are truly luxury.”
The market for secondhand clothing and accessories is going mainstream.
Neiman Marcus Group Ltd is taking a minority stake in Fashionphile LLC, an online seller of preowned designer handbags and accessories, according to company executives.
The RealReal Inc., a larger competitor to Fashionphile, is preparing for an initial public offering, according to people familiar with the situation. And on Monday, a retail chain owned byH&M Group began allowing shoppers in Sweden to buy and sell previously owned goods.
I couldn’t be more excited to share our big news with you. You’ve been with us for so long and really are the heart of what we do, so I wanted you to hear it from me first.
I type this with actual tears in my eyes: FASHIONPHILE has officially partnered with Neiman Marcus!
While we’ve been bootstrapped since our founding, Ben and I realized that this had to change in order to continue to grow and provide the best possible experience for all of you in this increasingly competitive landscape. When we began our outreach efforts looking for a traditional partner, we had no idea that we would end up where we are today. This is truly a dream come true, not only for us personally, but for all of us here at FASHIONPHILE.
Neiman Marcus is an iconic luxury retail brand. Their CEO, Geoffroy van Raemdonck is transforming Neiman Marcus Group into a digital luxury platform that provides luxury customers access to exclusive products, unique events, and intuitive solutions to anticipated customer needs. We are a part of this transformation. Our partnership with Neiman Marcus is a historic move because of what it means to the entire “recommerce” category. Neiman Marcus is the first major luxury retailer to expand into the pre-owned market, and they’re doing it with FASHIONPHILE. That is huge. ICYMI, used really IS the new new!
When we started FASHIONPHILE twenty years ago, the stigma of pre-owned meant that we occupied a relatively niche category frequented mostly by you early adopters and loyal fashionphiles who ‘get it.’ But as the years went by… you told a friend, who told some friends. And it only took a matter of time until the pre-owned revolution entered mainstream culture. Back when we launched, you had three options in your hunt for that amazing, nearly new, authentic ultra-luxury handbag: your local consignment store (still a fan!), eBay and FASHIONPHILE. But since then, there has been a tsunami of additional players in the recom world. In fact, 64% of women have already bought or are interested in buying secondhand products. And despite growing at 21x faster than the traditional broader retail market, the category is only just now coming into its own.
But we are setting our sights even higher! By partnering with Neiman Marcus, we’ll continue to redefine the future of the luxury retail market. Together, we will reimagine how both buyers and sellers participate in luxury and drive increased access to the most coveted brands on the planet. The ability to cash in on your luxury handbag and accessories investments puts more money back in your wallet for that next shopping trip – whether it be with Neiman Marcus or FASHIONPHILE!
Again, thank you for your support as we partner with Neiman Marcus to change not only the recom market but the luxury retail industry!