Luxury retailer Neiman Marcus has acquired a minority stake in Fashionphile LLC, an online seller of preowned accessories.
As part of the deal, Neiman Marcus and Fashionphile, founded in 1999, will be launching new ways for both buyers and sellers to more easily participate in the preowned market. The press release explains, “At select Neiman Marcus stores, customers will be able to receive an immediate quote for their items from Fashionphile but also payments they can spend immediately on new luxury items at the store. Neiman Marcus says it will not be selling any preowned merchandise at its stores.”
For Neiman Marcus, this will be like having their own mini consignment shop their stores, but it will take a lot of marketing to get customers to bring their used luxury goods into a store to sell.
For Fashionphile, the effect of a storefront “buy on the spot” means that their procurement and product availability may increase, but it will take a while. What this partnership really does for Fashionphile is marketing. The partnership with a name like Neiman’s will establish trust. The physical storefront will accelerate growth and attract new users, many of whom will be walk-ins off the street. But this leaves me with a few questions.
Will Fashionphile authenticate on the spot? Authentication can take minutes, but it can also take hours, depending on the authenticators knowledge of the product and the rarity of the item. Will customers wait for their items to be authenticated on the spot and sent to browse the store while they wait (hopefully)? Will they receive a text when their item is authenticated and their payment is ready? Will people be paid on the spot in cash or in Neiman Marcus store credit? The press release stated that immediate quotes will be issued and payments to purchase new items at the store. I obviously have a lot of questions how this will work.
How does the Neiman Marcus x Fashionphile partnership effect the online resale landscape?
For the pre-owned market, this investment shows that large retailers are acknowledging that the secondhand market has a place too. Will we see more retailers jump on the resale train?
According to thredUp’s Resale Report, the resale industry is estimated to be worth $20B and now investors and executives are seeing how the industry could make them big bucks too. The partnership between Fashionphile and Neiman Marcus leads me to believe that other full service luxury resale brands (Yoogi’s Closet, Rebag, Bag Borrow or Steal) could start seeing even more interest.
ThredUP’s resale report expects the market to grow to $41B in 2022, which means Neiman Marcus is smart to get on board with resale at this time. By allowing customers to bring in their gently used luxury items to a store they’re comfortable with.
Resale companies can either provide a peer-to-peer online marketplace or full service offering (photos, listing, shipping, authentication).
There are numerous reasons for the recent rise of resale marketplaces, including: increasing awareness of online resale models (online apparel resale models still relatively new); less negative stigma about buying secondhand goods (especially among younger users); resale sites offer better user experience for buyers and sellers vs. traditional thrift and off-price stores; environmental benefits from buying secondhand; and desire for frequent turnover of wardrobes, especially among Instagram generation.
For example, a few months back, I reported that Rebag received a very large investment to expand their own retail presence and hire more authenticators. Though Yoogi’s Closet seems to be happy with their bootstrap online boutique and their stellar reviews from repeat customers, I wonder if they might be interested in a retailer partnership as well (perhaps from Seattle-based Nordstrom?). Bag Borrow or Steal is probably still bringing in money from their spotlight in the Sex and The City Movie, and I have seen no info about investment from them.
We’ll see how the resale market unfolds.