A new resale service has secured nearly $3 million in funding, with the CEO of Balenciaga among its early investors. Reflaunt announced on Thursday that it had raised $2.7 million in a pre-series A funding round led by SLS Journey, the investment arm of off-price luxury fashion distributor MadaLuxe Group, along with former Jimmy Choo CEO and Coty Senior Advisor Pierre Denis, and Ganni founder and former CEO Nicolaj Reffstrup, among others, with an aim to “offer a variety of resale models to more leading global brands” and to allow consumers to resell pre-owned products “directly on the brands’ individual e-commerce platforms.”
“Reflaunt offers a disruptive proposition that enables fashion brands’ and retailers’ customers to easily resell or recycle their past purchases directly on the brands’ individual e-commerce platforms,” the 4-year-old London-based company stated in a release. “The items are then offered for sale on more than 20 marketplaces across North America, Europe, the Middle East, Southeast Asia and Australia.”
Not a resale platform, itself, Reflaunt connects brands – and their excess merchandise and/or consumer-sourced pre-owned pieces – to the secondhand marketplaces and/or empowers them to list products on in-house resale services, such as the one that COS hosts by way of its “Resell” marketplace. As the Wall Street Journal reported back in October, H&M-owned COS’ pre-owned service “was built using software from Reflaunt,” which enables customers to “quickly list used items through the item’s original retailer.”
The Journal revealed that “Reflaunt’s main product is software built into brands’ e-commerce sites that lets previous customers click ‘sell’ on an item they purchased through the website. It posts listings on brands’ resale sites if they have them, as well as other marketplaces.” Reflaunt CEO and co-founder Stéphanie Crespin stated at the time that “the secondhand market is very fragmented and completely disconnected from brands and retailers.” As a result, “it is very inefficient and time-consuming [for sellers] to create listings for different marketplaces.”
In furtherance of such programs, Reflaunt says that its “technology enables fashion brands to increase sales and customer retention rates, while accessing valuable data on resale performance of their own products.” This means that “marketplaces in Reflaunt’s network gain access to a large assortment of high-quality products sourced directly from the brands, allowing for purchase traceability, which mitigates counterfeit risk.”
To date, Reflaunt’s partners include Balenciaga, Cos, and Ba&sh, and the company has “several additional partner launches planned for early 2021.”
The news of the company’s latest round – which brings the company’s total raising to $3.7 million, with Balenciaga CEO Cédric Charbit and Swarovski creative director Giovanna Battaglia, among others, participating in a prior round – comes as a growing number of brands toy with the idea of partnering with established resale companies or launching trade-and-resell efforts of their own.
While resale is a burgeoning new economy (the multi-billion-dollar luxury resale market is expected to grow to $51 billion by 2023), luxury brands have largely shied away from pre-owned efforts in order to protect brand goodwill and maintain the image of – and the prices associated with – exclusivity. Paris-based luxury goods brand Chanel, for instance, has gone so far as to file lawsuits against resale sites, including The RealReal, in connection with such resale practices (and allegations of trademark infringement and counterfeiting), highlighting the rocky relationship between brands and resale entities, with such tension created, at least in part, by the fact that digitally-native resale companies and third-party marketplaces have substantially eroded the ability of brands to exclusively control the distribution of their products.
However, brands are seemingly waking up to the idea that their marketing-driven image of exclusivity is not at odds with participation in the resale market. (Note: Most big-name “luxury” brands – i.e., the ones that generate billions in revenue from the high turnover of large volumes of high-margin offerings, such as handbags and footwear – do not operate in accordance with the traditional principles of luxury, and instead, rely on their history and marketing of that history to present an image of exclusivity and thereby, preserve their ability to engage in premium pricing).
In that vein, brands have started to change their tune in order to meet growing consumer demand for pre-owned products and increase their control the lifecycle of their products beyond the initial sale. Just this week, Alexander McQueen announced a new tie-up with resale site Vestiaire Collective, which will see if buy-back unwanted garments and accessories from consumers, and list them on Vestiaire’s platform. Before that, fellow Kering-owned brand Gucci partnered with The RealReal in mid-2020 for a limited-time initiative to sell pre-owned Gucci items, sourced directly from Gucci, as well as from its own consignors.
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