French luxury group Kering has taken a 5 per cent stake in Vestiaire Collective, a leading platform for second-hand clothes and handbags, betting that the booming resale market will help it woo younger and more environmentally conscious shoppers.

The purchase is part of a 178 million euro (US$215 million) financing round announced on Monday which valued Vestiaire Collective at more than US$1 billion, the companies said.

U.S. investment firm Tiger Global management also invested in the platform, while existing shareholders including Vogue publisher Conde Nast and French private equity firm Eurazeo put more money in.

The pre-owned fashion market has enjoyed rapid growth over the last three years, with a further acceleration during the coronavirus pandemic, thanks to younger shoppers’ heightened focus on sustainability and also homebound consumers looking for good deals on second-hand clothes.

“There is a real shift happening that is going to shape the future of the fashion industry, and as a leader in the sector we want to shape that trend,” Kering’s digital chief Gregory Boutte told reporters.

The proportion of secondhand pieces in closets is predicted to grow from 21% in 2021 to 27% in 2023, with the value of the sector estimated to be worth over $60 billion by 2025, the companies said in a statement. Paris-based Vestiaire Collective said its transaction volume doubled in 2020.

Luxury groups have traditionally been wary of secondhand sellers, which weaken their control over distribution and pricing of their brands and, according to critics, can help spread counterfeit goods. But that is changing, and Kering’s star brand Gucci last year announced a partnership with U.S.-based resale platform The RealReal.

Reporting by Silvia Aloisi; Editing by Richard Chang.