Luxury Conglomerate Kering Takes Minority Stake In Luxury Resale Platform Vestiaire Collective

PARIS, FRANCE — French international luxury group Kering SA revealed an investment in Vestiaire Collective, snagging a 5 percent stake and board representation in the luxury resale platform. With the purchase, Kering has thrown its weight behind a business that has embraced data and digital means for global expansion and gained a foothold in the growing secondhand market.

“Pre-owned luxury is now a real and deeply rooted trend, especially among younger customers,” said François-Henri Pinault, chairman and chief executive officer of Kering.

Flagging intentions to leverage the position in the platform to push for wider change in the sector, Pinault noted plans to influence the industry toward more sustainable practices.

Kering’s offerings include Ulysse Nardin watches and Boucheron jewelry. The luxury conglomerate also owns Yves Saint Laurent, Gucci, Alexander McQueen, Balenciaga, Puma, Brioni, Christopher Kane, Bottega Veneta and other brands.

“This fits naturally with our entrepreneurial spirit, our pioneering sustainability strategy and our modern vision of luxury,” he said.

Kering and Tiger Global, along with a few smaller investors who weren’t named, have invested $216 million into the luxury resale platform in the current funding round. Executives declined to provide a breakdown of each investors’ share, or discuss the possibility of a higher investment in the future. The pair join a list of previous investors that includes Bpifrance, Condé Nast and Eurazeo Group.

Consumers are increasingly thinking about circularity when making purchases, as well as the sustainability commitments of brands they buy, particularly the younger, rising class of luxury consumers, noted Gregory Boutté, Kering’s chief client and digital officer.

“This trend is a real shift and it will shape the luxury industry and fashion as a whole for decades to come,” predicted the executive.

“We see our role at Kering as playing an active role at shaping what’s ahead instead of pretending it’s not happening and reacting to it,” Boutté said.

“This is a game changer,” said Maximilian Bittner, CEO of Vestiaire Collective.

“The resale sector as a whole is experiencing rapid growth, especially amongst Millennial and Gen Z consumers, which will come to shape the retail landscape of the future,” he added.

Vestiaire Collective recently unveiled a program with Alexander McQueen, the first luxury label to work with the platform for brand-approved efforts. The partnership emphasizes client relations, with plans for McQueen sales representatives to contact clients to see if they want to sell any pieces from the label, issuing credit notes for those who do, while the clothing for sale goes to the site’s brand-approved section — to be sold with an authenticity tag.

Asked if plans were for other Kering brands to follow suit, Boutté said that was the idea, but that the group’s labels are given the freedom to decide.

“They have no obligation…but given the importance of the trend, I think what we’re seeing with Alexander McQueen is a good signal of what is going to happen ahead,” said Boutté, noting the investment was made at the Kering group level.

The executive stressed the potential to deepen client relations through such set-ups, coming as a personalized service for clients, drawing them back into the store, taking back products they are no longer using and reengaging them with new products.

“It’s also an opportunity for our houses to deliver additional services and personalized service to their clients,” he explained.

Bittner took the helm of Vestiaire Collective in 2019 with plans to transform it into a data-centric, mobile-driven, Gen Z-focused business — bulking up technology teams, introducing flexibility into the commission system and increasing interaction with consumers.

Luxury goods, which have traditionally defended their business with the argument that their products are meant to last longer, are showing more interest in getting involved in the secondhand market.

The market for pre-owned goods has been growing briskly, and projections are for this to continue.

“The focus that we’ve had around circular economy, around engaging with our community, has brought these results to light,” said Bittner, who noted strong business at Vestiaire Collective in recent years, with growth in orders topping 100 percent.

The fundraising round confirms the company’s status as a unicorn and will allow it to further invest in technology and global expansion and deepen ties in the industry to “pioneer and revolutionize the way people thought about consumption over the last decade,” he said.

The company, which was advised by Goldman Sachs for the current funding round, plans to use the raised funds to scale up technology and data innovation.

“It’s a powerful moment to drive change for a more sustainable future,” Bittner said.

The executive cited the partnership with McQueen as symbolizing how the company would like to work with the industry.

Brand-approved resell services reflect “circularity that we want to achieve jointly to help consumers sell products that are maybe less wanted or not used any more,” Bittner said.

Market studies with BCG turned up interesting facts, he said, noting they discovered that a large proportion of consumers think about reselling products in the future, and take better care of them with this in mind. Consumers are also interested in trading up — buying fewer items, but focusing on better quality, he added.

“We did this on sustainability, we did this in digital and now we’re doing this in secondhand — we see this trend happening and we want to play an active role in shaping it,” said Boutté, referring to Kering’s involvement in change in the industry.

Photos Credit: Vestiaire Collective’s website