Farfetch Ltd. is keen on tackling two major considerations involved in the resale of luxury goods: authentication and quality preservation. And it’s amassing quite the portfolio of businesses and data to be able to do that.
“For our 2030 goals, as it relates to circularity, our ambition is to be more circular than linear,” said Niten Kapadia, Violet Grey managing director, during a talk given Sunday at the annual Shoptalk retail conference taking place this week in Las Vegas.
Farfetch, with a recent market cap of $5.6 billion, announced in January its acquisition of Violet Grey for an undisclosed price, with the luxury beauty site joining the company’s portfolio that includes its namesake brand, in addition to Browns, Stadium Goods and New Guards. Kapadia was named to head up Violet Grey in January, from his previous post as Farfetch vice president of operations.
“Our customers continue to share with us that they’re incredibly enthusiastic about preowned as a category. In fact, they’re demanding that and so I think for us being able to really cater to our customers’ needs and be able to offer an experience that really, I think, illustrates our commitment towards circularity is important,” Kapadia said.
Circularity doesn’t mean only preowned or resale. For Farfetch, it also means being able to offer repair services or upcycled items.
A big component of that will be the integration of Luxclusif, the luxury platform for business-to-business resale, into Farfetch. The company acquired Luxclusif in December for an undisclosed amount in a move seen as bolstering its resale ambitions.
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Farfetch, which saw revenue last year jump 35 percent to $2.3 billion, began piloting resale for handbags in 2019, first in Europe and then rolling it out to the U.S. in late 2020 under the name Second Life.
That resale business will continue to expand as the company works toward the long-term goal it revealed in late 2020 to be the seller of conscious items by 2030.
More specifically, those plans call for net zero emissions and a more conscious merchandise assortment of items that are preowned, recycled, upcycled or repaired through Farfetch services. The goal was first revealed in late 2020.
Kapadia said Luxclusif is still being integrated into Farfetch, so it’s early days. However, the executive said the company will “be able to take their technology and expand Second Life and really allow Luxclusif to be able to own the Second Life offering for Farfetch itself.”
Although Second Life is limited to handbags, it will eventually expand into other categories and geographic markets.
“We’ve seen over the pandemic over the last two years that our customer preferences have certainly demonstrated that there’s a real strong need for investment pieces, not just in handbags, but I think also in luxury jewelry as well as watches, timepieces,” Kapadia said. “And I think that part of it is just understanding how we can continue to optimize the supply as well as the demand to make it easy for our customers.”
Kapadia said the brands sold on the Farfetch site have expressed interest in how companies like Luxclusif are able to authenticate products and also preserve their quality.
“When we think about Farfetch itself, it’s an enabler to the entire luxury industry,” Kapadia said. “Our ambition is to be the platform for good for luxury and so, when we think about the data layer that we have, which underpins a lot of what we do, I think that part of the pitch is to be able to make sure that brands understand, as well as boutiques, the changing landscape of the consumer.”