It appears from this Vogue article that luxury brands, such as Balenciaga, can no longer avoid the rapid growth of the re-selling market. And why would they want to? Not only does it create an additional revenue stream for the company by capturing second-hand sales it would have not been a party to, but it can help to improve optics and client relationships.

How does it improve optics?

I know I personally perceive a brand to be more sustainable and therefore am more likely to purchase from them or aspire to purchase from them if they consider the circular fashion market – whether that be by re-selling or renting. Data shows I am not alone in this. A Business of Fashion report (here) “found that upwards of 70 percent of general consumers in markets such as France, the US, the UK, Germany and China indicate that second hand luxury has a positive or neutral impact on a luxury brand or retailer’s image and positioning”.

And what about relationships?

Balenciaga’s model in particular gives customers cash or credit which they can spend at Balenciaga, thereby almost securing future purchases. This circular effect means customers who may have only had one interaction with the brand when, for example, buying a handbag, could find their interactions to be multiplied threefold: (1) the initial purchase, (2) the resale, (3) the subsequent purchase using credit obtained from the resale.

Is it extra work for the brands?

Of course different brands have their own approach when it comes to re-selling, with some favouring to partner with re-selling partners such as Vestiaire Collective (e.g. Alexander McQueen). This can limit the extra work for the brand as the partner can often offer to handle the documentation, authentication, photography and merchandising of goods.

But is it actually more sustainable?

Luxury fashion is ideal for a resale market because it is generally more durable and timeless. Which, I suppose leads into the question: who throws away a designer item if it is in a condition that can be re-sold? Not me. Therefore, is re-selling luxury really more sustainable? Well, it sits within reduce, reuse and recycle – you are reducing your waste by passing it on to the next person and it is then being reused. It is also contributing to a circular view of fashion. Therefore, in my view it is a great step in relation to sustainability.

Other considerations

ESG strategies within a company are also an increasingly important criteria for investors when considering investment. Whilst I doubt Balenciaga are struggling to find investors, steps like this can show a pro-active approach which is attractive to potential investors.