Vestiaire Collective says new funding will boost growth in Asia, US
Fashion resale giant Vestiaire Collective has raised new funding with the completion of a $64 million round of financing. Existing shareholders have reinvested in the firm, alongside a number of new names that highlight the appeal of the business and the potential bright future that luxury fashion resale will continue to have once the coronavirus crisis is over.
The new money will be used to “continue transforming the fashion system while offering a smart, circular and responsible alternative to throwaway fashion; to jointly explore the expansion of the global business into Japan and Korea through [new investor] Korelya Capital; and expand the launch of direct shipping in the US.”
The new investors include, as mentioned, Korelya Capital (which is backed by Korean technology conglomerate Naver), plus funds managed by Fidelity International, Vaultier7 (a specialist female-led consumer fund), and Cuir Invest (backed by the French Leather industry).
The existing shareholders also taking part included Eurazeo, Bpifrance, Vitruvian Partners, Condé Nast, Luxury Tech Fund and Vestiaire Collective's CEO Max Bittner.
In announcing the new funding, the company emphasised its eco credentials and how its business model is synchronising with the way consumers are thinking.
It said that ahead of Earth Day's 50th anniversary, “the current economic and ecological crisis are accelerating an existing shift in consumer mindset, driven by growing criticism of waste-producing business models, and increased desire for purpose-driven brand action”. That feeds into the firm’s USP and it added that “as a company, Vestiaire Collective is committed to limiting the waste produced by the fashion industry, by keeping clothes out of landfill and increasing the number of times they are worn today, for a better tomorrow”.
It also said that following the pandemic crisis it expects: “Further adoption of online shopping, but more importantly an increased focus on social values and communities, with more people supporting each other; consumers are set to become increasingly resourceful as they look to resale as an additional way to raise funds and find unexpected value in their wardrobe; [and] environmental concerns will further drive a more conscious approach to consumption, as 20% of consumers expect to reduce their clothing consumption following the crisis.”
So has the crisis been affecting its business? Well, it seems any impact has been short-lived, although it gave no figures. It said the firm has seen deposits and orders “quickly rebound to the pre-Covid 19 baseline or above. During this challenging period this clearly demonstrates customer demand for circular business models, both now and looking ahead to the future of the rapidly evolving retail landscape”.
And highlighting the character of the new investors, it said: “We trust Vaultier7 as members and ambassadors of the Vestiaire Collective community to help us build on this momentum by expanding in the most thoughtful way. We are also excited by their extraordinary network which will support us in further unlocking under-utilised personal luxury goods to meet the demand of buyers globally.”
And the Korelya link will be key too to help Vestiaire Collective “jointly explore the expansion towards Japan, the biggest resale market in the world, and Korea in 2020 and beyond.”
The company added that the new round of funding will also allow for further acceleration of Vestiaire Collective's international business beyond the countries where the company's community is already well established and currently, over 80% of the French company's transactions are generated cross-border.
Importantly, the round will help it continue to drive ambitious growth in the US market and further develop its direct shipping model. Launched in Europe in September 2019, “the service is increasingly popular with a growing number of customers. Currently, already over 50% of orders in the EU are fulfilled through the new service, which is also growing at a rate of +60% month-on-month.” The model will be launched in the US in early summer followed by Asia before the end of 2020.
CEO Max Bittner said: “I am personally convinced that this unprecedented period of disruption will not only challenge where we shop but how we shop. Vestiaire Collective was built during the 2008 crisis, and proves today how it can help people in their daily life to make the most out of their belongings, but also to access fashion in a sustainable and conscious way.”
And Paul Degeuse of Korelya Capital said he believes “consumption patterns are on the verge of a deep structural evolution, and C2C platforms have a strong role to play here. We see in Vestiaire Collective an emerging leader and catalyst of this upcoming disruption. There are tremendous opportunities for growth in Asia, and we look forward to helping the company accelerate its expansion in this part of the globe.”
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