Fashionphile obtained its begin on the top of the dotcom increase in 1999, when founder Sarah Davis began promoting luxurious garments from her personal closet on eBay. Right this moment over 1,000,000 customers promote greater than $500 million value of Birkins, Rolexes and different high-end items on the platform yearly, which launched as a freestanding web site in 2007.
However to kickstart its subsequent stage of development, Fashionphile is now investing in a bodily retail footprint, together with its personal shops in addition to promoting wholesale to different retailers resembling Saks Off Fifth and obligation free outlets. In 2025, Fashionphile will open new brick-and-mortar areas in San Francisco, Dallas, Atlanta, Boca Raton and Philadelphia. By the top of the yr, it should have a footprint of 14 outposts in varied codecs.
This isn’t Fashionphile’s first experiment with bodily retail. The corporate opened shops in California beginning in 2006, however moved into Neiman Marcus them after receiving a minority funding from the division retailer chain in 2019. Most of those areas, nevertheless, targeted on serving potential promoting prospects somewhat than showcasing stock to customers, mentioned Davis.
Among the new shops additionally give attention to shopping for, the place luxurious customers can commerce in secondhand items for money. Others are conventional shops in high-foot visitors areas, although each location will serve each customers and sellers.
Fashionphile will not be the one on-line resale participant eyeing offline alternatives. Late final yr, The RealReal introduced new shops in Houston and Miami, bringing its whole variety of shops to fifteen. Rebag, which has the same enterprise mannequin to Fashionphile and 4 shops of its personal, opened shop-in-shops inside 5 Bloomgindale’s areas in August. Final week, Rebag additionally partnered with Walmart to assist increase the large field retailer’s providing of pre-owned luxurious merchandise by way of its on-line market. Even peer-to-peer eBay-competitor Mercari ventured into brick and mortar with a storefront in Los Angeles.
On-line resellers are reaching the identical conclusion as many direct-to-consumer manufacturers that started off proudly e-commerce solely: there’s sure important parts of the retail expertise that merely can’t be recreated on the internet.
“You may’t replicate the treasure hunt expertise on-line,” mentioned Cynthia Energy, founding father of Molte Volte, a consultancy that focuses on style reuse and recycling and co-host of the Untangling Circularity podcast. “In the event you’re in individual and you discover the fitting pre-owned piece that feels prefer it’s one in every of a form, that conversion charge shall be a lot greater than when you discover one thing on-line.”
Fashionphile, which launched its present retail technique in 2021, designed its new retailer experiences based mostly on luxurious clienteling, in accordance with Davis. “We mentioned if we have been going to do that, let’s actually hearken to the client, and never simply function as the most effective reseller on the market however as a luxurious model,” she mentioned. “Luxurious gross sales will not be transactional, they’re based mostly on relationships.”
In 2022, as a part of its retail push, Fashionphile employed Chanel– and Bulgari-veteran Angela Dotson to develop its personal consumer technique. The last word aim is to function in a manner that’s “totally fluid,” Davis added: to supply consumers the flexibility to get a quote for his or her merchandise on-line, drop it off within the native Fashiophile retailer, and whereas they’re there, decide one thing new.
Merely opening a retail location will not be sufficient to justify its prices, nevertheless. Right this moment, a profitable retailer doesn’t solely convey legitimacy for an internet operation or function a billboard for a model; it’s an important solution to differentiate a enterprise in a market with many gamers with comparable worth propositions.
“We’ve discovered the way to merchandise our shops in order that they’re not simply lovely museums,” mentioned Davis. “They really are doing significant gross sales as a result of for us, we’ve the fitting product for the toes which might be strolling within the door. That’s how we’ve developed.”
The secondhand market has expanded considerably over the previous decade, pushed by digitally native platforms like The RealReal and Fashionphile that recognized — and rapidly populated — a white house for fashionable, fashion-forward internet buyers. However lately, the speedy development amongst this cohort of internet-savvy early adopters has slowed. For The RealReal, the variety of energetic consumers have shrunken in latest quarters since a peak in 2022, from 430,000 within the three months ending Dec. 31 of that yr to 389,000 in its third quarter final yr.
All of the whereas, on-line resellers are more and more competing with conventional brick-and-mortar secondhand retailers, whose companies have additionally flourished lately. As an example, Winmark Company, the proprietor of thrift chain Plato’s Closet, noticed gross sales climb almost 50 % and internet earnings by one-third between 2018 and 2023. In the meantime, Japan-based luxurious consignment store 2nd Avenue plans to greater than double its footprint within the US to 100 shops by 2029.
“We’re sort of realising as we go right into a later stage of the enterprise that there’s tens of millions of customers on the market who would love what we’ve to supply however they’re not conscious of what’s on the market in luxurious resale e-commerce,” mentioned Ben Hemminger, co-founder and CEO of Fashionphile. “Retail is a solution to get in entrance of them.”
Conventional retailers together with department shops and even large field chains have develop into new champions of luxurious resale lately, mentioned Charles Gorra, founder and chief govt of Rebag.
Arkansas-based division retailer chain Dillard’s has been providing secondhand luggage from manufacturers like Chanel and Prada since at the least 2017 by means of a partnership with What Goes Round Comes Round, a stalwart within the luxurious consignment house. Selfrides has the same providing by way of Vestiaire Collective. Now, with Bloomingdale’s and Walmart within the combine, their on-line resale distributors are capable of attain a broader vary of consumers.
“We’ve spent a few years establishing our main platform, which is the Rebag [website] and our shops, however now we’re within the subsequent chapter of magnifying that,” he mentioned. By partnering with established retailers, Rebag can attain new “ecosystems of consumers” exterior the style hotbeds in New York, California and Florida, Gorra added.
Wholesale has been an avenue for Fashionphile to enter worldwide markets. Its merchandise are actually offered in German division retailer Galeria Karstadt Kaufhof, for example.
Fashionphile guess large within the wholesale class with its acquisition of Canadian B2B resale firm LXRandCo, Inc. in November 2023. LXR specialised in promoting secondhand designer purses to department shops resembling Lord & Taylor and Century21. Fashionphile acquired its mental property in addition to remaining stock after LXR filed for chapter.
“It’s an enormous endeavor to go worldwide, and to decide on the place to go or decide whether or not there’s demand there,” mentioned Hemminger. “Wholesale permits us to sort of dip our toe within the water of some worldwide markets.
Right this moment, Fashionphile has a presence throughout Europe and on cruise ships. Retail and wholesale made up about 30 % of gross sales final yr, and will account for half of the enterprise sooner or later. Hemminger added.
