French fashion resale platform Vestiaire Collective, which already has backing from luxury fashion conglomerate Kering, hopes to crowdsource at least €1m from its European and UK customers to boost its profitability.
Last year the company granted shares to all its employees but it believes opening the offer out to its collective of buyers and sellers will help it to gain market share and reach profitability with a potential IPO on the horizon.
Through the fundraise, investing customers will gain access to the latest class of preferred shares issued by the company and will become shareholders alongside its existing global investors, such as Eurazeo, Condé Nast, Bpifrance, Kering, and Generation Investment Management.
Vestiaire Collective says the crowdsourcing campaign will enable it to deliver profitable growth across its core markets in Europe, the US, and APAC, make the app even more engaging and seamless to use, and improve the experience of its customers to offer them a so-called “best-in-class service”.
The B Corp, which has already raised €551m from investors, plans to reach profitability toward the end of the year.
Vestiaire Collective CEO Maximilian Bittner explains: “On the back of our continued success, 2024 will be a pivotal year for Vestiaire Collective. We aim to continue gaining market share in the global fashion industry and reach profitability towards year end. Through this community fundraising, our engaged customers can take an even more active role in shaping a more sustainable future for fashion.”
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Vestiaire Collective co-founder and president Fanny Moizant adds: “Since the company’s inception in 2009, community has been at the heart of our model. Our first community is our employees, without whom this journey would not have been possible, which is why it was important for us to grant shares to everyone on our global team last year. As a next step, we are excited to invite our broader community of customers on this adventure and encourage them to be part of our global success story.”
The fashion resale market’s profitability challenge
Vestiaire Collective describes the second-hand fashion market as an attractive proposition given it was said to be worth an estimated $211bn in 2023, and could reach $350bn by 2027.
However, a recent report published by GlobalData suggests resale players are struggling to remain profitable with additional competition from major brands like Zara, Shein with their in-house resale services.
The report shared that although resale apparel platforms like Vinted and Depop have consistently experienced “significant revenue growth,” both recorded losses in FY2020/21 of £118m and £85m respectively which it adds, “highlights the precarity of the market.”