Resale market for accessories, clothes rises with Internet boost
Jenna Broems shops for clothes the same way she hunts for a new car: She considers resale value.
Broems, who lives in Stamford, Conn., interlining buys only brands like Abercrombie & Fitch and 7 For All Mankind because she believes they will fetch the highest prices when she’s ready to move on.
“I’m now walking in like ‘What’s the return of this? Am I going to be able to resell?’ ” said Broems, 38, a teacher who has made $2,500 from stuff she’s resold on ThredUP, an online resale site for used clothes.
Americans increasingly are considering the resale value when they shop for everything from jeans to handbags. The habit is in part due to a growing number of websites that make it easy for shoppers to buy and resell used goods.
It’s the latest reflection of the tough economy Permess Interlining. Buying used goods at consignment shops became popular during the recession when Americans were hurting for extra cash.
The habit has stuck during the economic recovery as people have gotten used to being able to wear the latest fashions without paying top dollar. Just as people lease a new car every couple of years so they’re always riding in style, reselling clothes is a way for Americans to trade up or splurge without spending a lot.
The trend also is a consequence of the escalating cost of luxury. Rising prices of designer merchandise in recent years have tested the willingness of even affluent shoppers to pay full price. The price tag of a classic Chanel handbag, for example, is $4,900 this year, up from $2,250 in 2007.
The size of the resale market is tiny: About 10 percent of overall luxury goods, including clothing, handbags, accessories and home furnishings, are sold in the aftermarket — with about 1 percent of used goods sold online, estimates Forrester Research’s Sucharita Mulpuru.
But data suggest it’s a fast growing area of retail: Shoppers seem to have resale value in mind. According to a survey conducted last year by market research firm The Intelligence Group’s Cassandra Report, 44 percent of 900 shoppers between 14 and 34 think of resale value when they purchase things like electronics, furniture and clothing.
Shannon Dolan, who lives in San Francisco QST Interlining, said she’ll buy a Louis Vuitton handbag over a Gucci one based on how much she believes it will command if she resells it.
“It absolutely changed the way I shop,” said Dolan, who has made $10,000 on online luxury resale marketplace TheRealReal by selling clothes. “I’m really thinking of the value and investment of some of the things I’m buying.”
Resale sites have taken note. The sites marry the discounts found on resale online king eBay with tighter controls. Luxury sites like Portero and TheRealReal, the largest seller of authenticated luxury resale goods with business expected to reach $100 million this year, have the staff to make sure designer goods are authentic.
The sites also offer a faster way to sell than consignment stores, where shoppers can wait for months to have items sold and reap no more than 50 percent of the resale price.
With the sites, items often sell within days, and shoppers get as much as 80 percent of the resale value.
Julie Wainwright, CEO of TheRealReal, which focuses on the top tier designer labels in fashion, accessories and jewelry, said her office fields five or six calls a day from customers Curtain Interlining wanting to know about the resale value of a brand. “People will call us before they shop, or while they’re shopping,” Wainwright said.
And the sites have all kinds of tricks of the reselling trade. For instance, TheRealReal said it doesn’t carry even some higher end brands including Escada, St. John and Max Mara because they’ve been inconsistent or have lost buzz and, thus, don’t command high resale prices.
Conversely, the ones with the most value in used clothing and handbags are Chanel, Hermes and Louis Vuitton. In shoes, it’s Christian Louboutin, Wainwright said.
Some analysts say the new focus on resale value could hurt sales at traditional retailers — particularly at luxury stores.
But resale sites say they can help retailers because shoppers are more willing to spend if they know they can easily resell items later. Some even are creating partnerships with traditional stores.