industry. According to consignment specialist ThredUp, the secondhand and resale market is expected to reach US$53 billion by 2023. While thrifting is not new, its recent digital facelift has allowed it to be rediscovered by a much wider audience, especially Gen Zs.And now, even luxury brands want in. Bain & Company estimated the luxury resale market is valued at €28 billion with positive growth despite the pandemic’s impact across the category.Recently, luxury online marketplace Farfetch, acquired resale stockist Luxclusif to strengthen the company’s own resale platform Second Life by expanding the brand’s existing assortment and authentication capabilities. Luxclusif had previously sourced and supplied for other well-known resale websites such as Vestiaire Collective and Tradesy.Giorgio Belloli, chief commercial and sustainability officer of Farfetch, said in a statement, “The opportunity for us is selling new products and selling pre-owned products, I think these two things are extremely complementary. We definitely see the opportunity to become a more relevant player within the space by offering both.” Introducing circular fashion One of the factors fuelling the shift to resale is the demand for sustainably sourced goods. Not a stranger to wastage, fashion is a major contributor to global pollution. Many customers believe shopping secondhand items places less stress on the supply chain and reduces consumption.Circular fashion introduces the concept of extending a product’s lifespan by recycling it over and over again. Aside from resale, repairing, upcycling or clothing rental also fall under the circular fashion umbrella. Brands are now leveraging this system to integrate healthier sustainability practises into their company.Burberry’s partnership with My Wardrobe HQ, a luxury rental and resale platform, will introduce the heritage brand’s first rental and resale offering that aims to aid the brand’s sustainability goals.Vice president of corporate responsibility at Burberry, Pam Batty said, “We are delighted to partner with My Wardrobe HQ to offer our communities a new way to shop sustainably for luxury pieces of the highest quality and craftsmanship, whilst expanding on our existing reuse, repair and recycling initiatives. Supporting the principles of a more circular economy is key in achieving our ambition to be Climate Positive by 2040.”The product edit with My Wardrobe HQ will include a variety of iconic Burberry products such as clothes, trench coats, handbags, footwear and other accessories. The items can be rented for four, seven, 10 or 14-day periods or even purchased completely. Forty per cent of the sales will also be donated to Smart Works, an organisation which provides resources to unemployed women in need. Expanding customer reach Before the resale and rental market had been embraced by the luxury industry, many brands were opposed to their products going on the secondhand market.With little control over how the products are marketed and presented, brands feared resale would dilute their brand value and deter customers from purchasing new products. For instance, Chanel went as far as to sue resale platforms TheRealReal and What Goes Around Comes Around for “piggybacking on [its] reputation.”But the massive profitability within the market has many brands changing their tune. “Rental and resale allows younger generations who don’t have as much disposable income to actually get a feel for a luxury brand,” said Tina Lake, co-founder of My Wardrobe HQ.“They can rent it out, see if they like the brand and actually perhaps save up to buy that special item. They can then rent it out to make the money back.”  Lake also mentioned My Wardrobe HQ’s core audience for their rental service begins as young as 25 years old.Even among high earning groups, only six per cent of Chinese shoppers kept their luxury goods for more than ten years as revealed by a study conducted by luxury conglomerate Kering. Driven by the idea of ‘newness’, the rental service also targets fashion forward customers with a rotating wardrobe. Without the need to commit to ownership, these customers can pay a subscription fee to receive the latest fashion products whenever they want it.While most companies have yet to work out all the kinks related to rental, namely the cleaning and vetting processes, many luxury brands are open to exploring this option as they would have continued ownership over the products as opposed to resale where they are unable to decide how the items are priced. Protecting brand value “We care a lot about controlling the customer’s experience, but we also realise that resale is going to grow whether we like it or not. So we want to play an active role in shaping it, and defining our own place within it,” said Grégory Boutté, Kering’s chief client and digital officer.The parent company of Gucci, Saint Laurent, Bottega Veneta, Balenciaga and more – Kering has taken a huge bet into resale by investing US$216 million into well-known French secondhand luxury marketplace, Vestiaire Collective.Prior to the investment, Vestiaire Collective had collaborated with Kering-owned brand, Alexander McQueen on the ‘Brand Approved’ program where customers of the brand would be offered store credit to return garments, accessories, and shoes from previous collections, which would then be sold on the platform.Using a similar model for their current partnership, Kering sees this partnership as an opportunity to explore potential new revenue streams from the secondhand market, the first of the experiments being the Gucci Vault –  an online concept store, with a curated assortment of old Gucci items, vintage finds and selected designers, chosen by creative director Alessandro Michele himself.Aside from the French online platform, Gucci and previously-owned Stella McCartney had also worked with TheRealReal on special product edits and store credit scheme to entice resale customers.Since the start of last year, department stores Harrods, Neiman Marcus and a handful of designer brands including Oscar De La Renta, Ralph Lauren, Valentino, Vivienne Westwood, Christopher Kane and Jacquemus have ventured into rental services. Is luxury investing in the secondhand market for the long haul? Not one to be left behind, Kering’s main rival, LVMH, has chosen alternative ways to enter the market. In 2018, the owners of Louis Vuitton, Tiffany’s and Dior took a minority stake in popular New York sneaker consignment store, Stadium Goods.Earlier this year, LVMH launched Nona Source, an online market platform to resell deadstock material and leather sourced from the company’s subsidiary brands including Fendi, Givenchy, Celine and Marc Jacobs. All the materials sold are listed nearly 70 per cent off the original wholesale price.But unlike Kering, the largest luxury conglomerate in the world is not ready to commit to the secondhand market completely, remaining adamant that they would not want to profit off their products being resold.While having no immediate plans to enter the resale market, Prada is ‘seriously’ considering the jump. Prada’s director of marketing and head of corporate social responsibility Lorenzo Bertelli revealed that “secondhand is a strategy we have been investigating for more than a year.”Research by McKinsey confirms Bertelli’s sentiments, “luxury resale is here to stay – and those brands that choose not to participate risk missing out on a significant opportunity.” For brands who are still hesitant, the consultancy states, “Done prudently, brand entry should not erode margins, and would result in only limited cannibalisation.”