Neiman Marcus wants customers to buy brand new at its stores, and then drop off what they no longer want at one of its designated locations.
That designation will be called Fashionphile, the luxury pre-owned sales site that just sold a minority stake to Neiman Marcus Group. It’s a significant move for Fashionphile, making it the first pre-owned e-commerce investment play by a luxury retailer. Neither party disclosed the amount of the investment.
While Neiman Marcus will have drop-off points at select stores for the pre-owned goods, the retailer itself is not getting into the resale market, as all items will be sold exclusively through Fashionphile.com.
Fashionphile, founded in 1999 by Sarah Davis as an online reseller, is focused solely on the ultra-luxury handbags and accessories resale market. According to a 2019 ThredUp report on the pre-owned sector, the market is projected to grow to $23 billion by 2023. Headquartered in Carlsbad, Calif., the company has brick-and-mortar locations in its hometown, where it operates a warehouse, as well as locations in Beverly Hills, San Francisco and New York.
“Neiman Marcus is the perfect partner for Fashionphile as we pursue more innovative ways to engage with customers,” Davis, president of Fashionphile, said.
Adding to that, company CEO Ben Hemminger, said, “Customers are approaching luxury in new ways, and pre-owned is at the center of that shift.”
According to Neiman Marcus, there’s limited overlap between buyers and sellers in the pre-owned luxury market.
The arrangement for the buying, selling and authentication process, will allow the luxury retailer to let its existing customers partake in the pre-owned market. At the same time, the move is expect to bring in a younger consumer pool before they hit their peak spending years.
Fashionphile has a current digital inventory of 15,000 items. The plan is for customers to be able to bring in high-end luxury handbags and accessories to certain Neiman stores for an immediate quote from Fashionphile. If they elect to proceed with the sale, they will receive immediate payment in cash that can be used to purchase new luxury items while inside the Neiman Marcus store.
“Our investment in Fashionphile is an exciting step in Neiman Marcus Group’s transformation into a luxury customer platform, as we work to better serve our customers, continue to shape the future of luxury and position Neiman Marcus for long-term and sustainable growth,” Geoffrey van Raemdonck, Neiman Marcus Group CEO, said.
According to van Raemdonck, more than half of Neiman Marcus customers are already engaging in the pre-owned luxury market. The exclusive partnership with Fashionphile, he noted, “exemplifies our commitment to providing our customers with services and offerings they want and need,” adding that it will be able to tap into younger and aspirational shoppers that are “already devoted to luxury brands.”
While the investment in Fashionphile is a first for any luxury retailer in the resale sector, it isn’t Neiman’s first foray into the pre-owned market. The company tested the waters back in 2015 through a partnership with luxury consignment firm, The RealReal. That arrangement, which lasted for a year, was an in-store consignment program that, in turn, provided consignors payment in the form of Neiman Marcus gift cards that had an extra 10 percent tagged onto the value of their payout. The RealReal is currently on the hunt for bankers that can help it complete an initial public offering later this year.