There’s Money Lurking in Your Closet

Can you name an asset that has steadily appreciated in value over the past decade, impervious to market fluctuations, appreciating 500% between 1980 and 2015?

It’s not financial services or heavy industry or even technology. It’s the Hermes Birkin bag. Yes, a handbag. But not just any handbag. The Birkin bag, created by the late former Hermes CEO Jean-Louis Dumas for actress Jane Birkin has increased an average of 14.2% a year for those 35 years for a total  increase of 500%, according to a recent study by Beverly Hills handbag reseller Baghunter.

Iconic Birkin bags, which resell for upwards of $10,000, (almost twice their cost new 15 years ago) do not have bad years. They appreciate over time, rather than depreciate…like buying a Basquiat ten years ago. At the very least, they retain 80-90% of their value. It’s an overall trend in luxury goods today and has a ripple effect on the entire fashion re-sale market – including men’s fashion.

The upward price trend

A little closer to terra firma, retail industry research shows most luxury label used handbags sell at a 35% discount to store prices. Clothing – apart from iconic labels such as Gucci, Yves St Laurent, Chanel, or Hermes – fetch about a third of their retail price.

But those prices are mounting across the board: the definitive retail resale report by ThredUp with GlobalData issued in June, 2021, shows the market value of the secondhand apparel market worldwide has been increasing steadily from 2012 to 2025, estimated to be worth $27 billion U.S. dollars, $43 billion this year, $77 billion by 2027, and $84 billion by 2030.

The report shows the number of consumers trying resale is increasing, too: 188 million tried reselling for the first time in 2021, compared to 36.2 million in 2020. So, it’s not surprising to see that the resale fashion market is currently growing at a rate that’s 11 times faster than traditional retail.

Why?

“We are in the early stage of a radical transformation in retail,” James Reinhart, co-founder, and CEO of ThredUp, says in the report which surveyed 3,500 Americans in March and April of last year. “Consumers are prioritizing sustainability, retailers are starting to embrace resale, and policy makers are getting on board with the circular economy.”

Resale & the environment

A separate report by Bain & Co. and Depop shows that 65% of shoppers chose resale items for the prices, which are – usually – lower than the ones at retail stores; however, that report also showed 75% of those surveyed said that the main reason they shopped second-hand was to reduce general fashion consumption. This is a trend that seems to impact GenZ especially: 90% of report respondents were under the age of 25.

The environmental impact is substantial. The ThredUp report shows that while the footprint of a new item typically uses 78.5 gallons of water, a secondhand item uses only 1.2 gallons. On the carbon emissions side, new items typically contribute 21.1 pounds of CO2, while used products contribute 3.7 pounds.

Contributing to the growth in both buyers and sellers of used fashion are the slew of online possibilities sprouting up over just the past five years, some of which are publicly listed: The RealReal (the first to go public in 2019), ThredUp and Poshmark (which listed in 2021), while Vestiaire Collective remains privately held. Between them these fashion resellers are valued at around $8.4 billion.

And luxury department stores are getting in on the action: Saks Fifth Avenue, for example, sells used designer handbags at lofty prices in its Off Fifth outlets, and the resale boutiques worldwide that have been the cornerstone of this market for time immemorial are sprucing up their installation and boosting their own prices.

What the reseller professionals say

All these new players have shaken up the playing field for resale boutiques on the ground in the real world. Consigners are becoming smarter, and shoppers are indeed more willing to buy second-hand.

“In the last 3 years there has been an acceleration in the number of depositors,” says second-generation consignment shop proprietor Christelle Gosse, who has run La Marelle, one of the best-known “depot-vent” (consignment) shops in Paris. Located in the tony Galerie Vivienne between Palais Royal and Place des Victoires, La Marelle is a French tradition: in business since 1974, the shop has had just two proprietors.

“More and more people (men and women) want to resell their clothes,” she continues. “And customers are less and less reluctant to buy second hand under certain conditions. I think that any competition is healthy, and the impact is rather positive because it democratizes the resale business.“

In the U.S., Nicolas Delgado, who owns The Fine Art of Design in Palm Desert, California, says the online resellers are improving his business by educating consumers. “I think with online companies like The RealReal and Poshmark people are getting a better understanding of how they can make money themselves.”

But the young Parsons School of Design graduate who studied fashion, design history, and sustainable business models and opened his shop in 2011 is facing competition from online resale for iconic handbags.

“I see people selling more of their designer bags such as Chanel and Louis Vuitton through online resources instead of bringing them into the shop. But in my shop, I’ve noticed a greater understanding of the market among consumers — more of an appreciation of resale value,” he said.

Participating in this resale phenomenon as a shopper is straight-forward, and a bit like a treasure hunt. You go online and click, or you stop in a boutique.

Shellie Karabell photo

3 steps to reselling

But how about as a consigner? How do you sell your own fashions to make money from this trend?

Online resellers explain how their intake and sales processes work – the ReaReal, for example, will come to your house. Consignment shops welcome you in the door. But online or in person, how do you start?

Do your research. “The vintage fashion guild online label resources offer a valuable database of labels and their historical value,” says Nicolas. “And go to the resale or consignment shop in person and get a sense for the curation and see if it aligns with what you have in your closet.”

Be aware of trends. “An item that is branded, recent, clean and in good condition is easily resold,” says Christelle. Today there is a very buoyant market for rare designer handbags and watches (Ed note: Gucci, Hermes, Rolex, etc) – so much so that prices for these second-hand are becoming even more expensive than new models.” Nicolas adds, “I trust my own taste. I think about what sells and what my friends wear and look for and what’s in style.”

Dig through your closet. “See what you’re not wearing and then ask yourself if this is worth selling or donating,” says Nicolas. Before heading to a resale shop with an armload of clothes, heed Christelle’s advice: “Clothes should be recent, in good condition, cleaned and ironed.”

Resale is no longer a domain reserved exclusively for women. La Marelle, for example, recently added a men’s corner. And resale levels the playing field. “Buying and selling second hand allows access to pieces that are often difficult to buy new,” says Christelle. “In resale, they’re no longer reserved for an elite.”

Shellie Karabell photo