Neiman Marcus Group Ltd. is throwing money behind resale.
The Dallas-based company has taken a minority stake in online consignment market Fashionphile, which specializes in pre-owned designer handbags and accessories. It becomes the first major luxury retailer to directly invest in resale — a sector that is expected to grow to $23 billion by 2023, according to a recent ThredUp report. (Neither purchase price nor percent stake was disclosed.)
“Over half our customers already engage in pre-owned luxury, and this exclusive partnership exemplifies our commitment to providing our customers with services and offerings they want and need,” said Neiman Marcus CEO Geoffroy van Raemdonck. “With Fashionphile, we will engage with customers participating in the secondary market and introduce Neiman Marcus to younger and aspirational shoppers already devoted to luxury brands.”
Founded two decades ago by entrepreneur Sarah Davis, Fashionphile now operates its re-commerce platform along with four brick-and-mortar showrooms, one of which is on Madison Avenue in New York.
As part of the transaction, select Neiman Marcus stores will serve as drop-off points for customers’ pre-owned pieces. They will then be able to receive immediate payment, which can be used to shop the department store’s wide inventory of luxury items.
“Customers are approaching luxury in new ways, and pre-owned is at the center of that shift,” said Fashionphile co-founder and CEO Ben Hemminger. “Fashionphile is ideally positioned to benefit from this trend, and we look forward to leveraging the resources, capabilities and expertise of Neiman Marcus to help us scale more quickly.”
The Fashionphile investment also comes as its competitor The RealReal is reported to be mulling an initial public offering as soon as this year. The luxury consignment platform has managed to raise nearly $300 million in funding and opened two physical retail spaces.
If successful, The RealReal would become the first U.S. resale site to go public. The re-commerce sector is also populated by sites including ThredUp, Poshmark and Depop, as well as brick-and-mortar chains like Beacon’s Closet and Buffalo Exchange.
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