Luxury Resellers Are Giving Fashion a Second Life

The burgeoning market for 'pre-loved' goods

Photo: Karl J. Kaul/ Wonderful Machine

Jaclyn Shanfeld became a fashion entrepreneur by accident. After snapping off a heel while rushing to a bar mitzvah in Beverly Hills, she hobbled into the local Fred Segal boutique and panic-bought a pair of Yves Saint Laurents—that turned out to be too small. After a few hours of podiatric torture, Shanfeld slumped in a chair to ponder her fate: She’d just dropped $900 for designer shoes that didn’t fit. Return them? Sorry, Segal didn’t take shoe returns. What about dropping them in a consignment shop? “They’d sell them for $398 and take a 50 percent commission,” Shanfeld scoffs, “which would have left me enough money to buy lunch. It was a fiasco.”

It was also the birth of, a peer-to-peer resale site that deals exclusively in luxury apparel—gently used, like Shanfeld’s YSL heels. Women join by submitting their sizes and measurements, then a custom algorithm matches buyers up with similarly sized females with items to sell. And while big-city consignment shops take anything from 50-75 percent of a sale price, Shanfeld assesses only 18 percent. Business, she says, is booming. “We’ve been up for seven months and we’re growing faster than I ever imagined—almost 50 percent a month,” she says. isn’t alone. It’s one of a growing number of luxury resale platforms to appear online of late. Their names—Fashionphile, Covetique, LuxuryExchange—are redolent of runway desires. But while the merch might be used, this is not your mother’s consignment shop. The newest clique of luxury resellers offers choice goods, personalized service, reasonable fees and deep discounts, like the Dolce & Gabbana cocktail dress that recently listed for $250.

At, another newcomer consigner, the used Burberry bags are 70 percent off retail, and buyers can pay with cash, barter or a combination of both. “It gives people more flexibility,” says CEO Elise Whang, who started the site last April when law school debts cut into her shopping but her career still mandated that she dress well. With SnobSwap’s budget-friendly setup, “you can get your fashion fix, monetize your own wardrobe and swap with like-minded people,” Whang says., yet another newcomer to the segment, also boasts jaw-dropping discounts. Say, a Coach python skin belt for just $57, shipping included. Not unlike Shanfeld, Threadflip founder and CEO Manik Singh started the site after his wife, trying to dispose of a pair of designer boots she never wore, didn’t want to deal with the aggravations of traditional consignment. Threadflip takes a modest 20 percent commission on the goods that users post themselves, but it also offers its White Glove service for women who have lots of items to sell but don’t have time to do it. “We’ll send you a box for your item, manage the whole sale and send you a check,” Singh says. Even with the steeper 40 percent commission, “we’re seeing lots of activity.”

Indeed, the new generation of luxury resellers has discovered that with a few full-service touches, they can even draw customers who have the money to shop on New York’s Madison Avenue. Part of it is semantics: Much like Mercedes successfully turned “used” cars into “certified, pre-owned” ones in the early 1990s, online designer resellers shun terms like “used” and “secondhand” in favor of “vintage and collectible” and even “pre-loved.”

But the greater value they add is selectivity and customer service. For example, luxury-resale pioneer, founded in 2004, showcases only coveted goods like Gucci furs and diamond-studded Rolex watches. It also offers a personal-shopping service, just like a high-end department store. “If you’re looking for a Fendi or Chanel bag from a certain year, we’ll help you find it,” says operations director Alexis Clarbour. And business? “It’s phenomenal,” she says. “We’re having our best year yet.” (Privately held Portero, like most of these sites, declined to release financial results.) Also occupying luxury resale’s high ground is, which differentiates itself by selling the closets of prominent female executives, all of whom are profiled on the site. It means that every Louboutin heel, every Hermès scarf has a provenance that enhances its desirability. Vaunte has sold over $1 million worth of goods since its launch in November, according to CEO Leah Park. “This,” she says, “is the last frontier of fashion.”

It may well be. While there are no statistics specifically for luxury resellers online, traditional brick-and-mortar consigners saw their business grow by 12.7 percent in 2009, the latest figure available from the National Association of Resale Professionals. “Every time the economy slows down, it’s an opportunity for this business,” says the trade group’s executive director Adele Meyer. “And once people start shopping resale doesn’t mean they stop once the economy improves.” Designer resellers are also expanding with venture capital behind them, like the $14 million that raised in April. “This is a niche category,” observes Jason B. Cohen, evp of luxury brand consultancy The O Group. “Enterprising entrepreneurs have discovered some white space, and are finding ways to make something really terrific.”

Luxury apparel consignment itself is nothing new. Encore, a resale shop in New York where Jacqueline Onassis dumped her unwanted Dior and Chanel, opened in 1954. So why are fashionistas suddenly flocking to its e-tailing equivalent? Observers point to several reasons, starting with a lingering recessionary hangover. While number crunchers at the Fed might tell us that the American economy has recovered, it doesn’t mean that consumers are confident enough to pull a shopping spree at Gucci.

“When I walk up and down Rodeo Drive, people are not in the stores,” Shop-Hers’ Shanfeld says. “Women don’t have the kind of money they had in the past to buy $3,000 handbags. But we still have the desire to be fashionable and to have luxury goods.”

Whang agrees. “There’s been a change in mind-set,” says the SnobSwap founder. “Consignment shopping used to have a stigma to it, but as the younger generation—who have learned from the recession—move into the workforce, they’re more open-minded about recycling and reusing, and fitting that into their lifestyles.”

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