Farfetch is making bigger bets on the luxury resale market.
The global luxury fashion platform on Thursday said it acquired Luxclusif for an undisclosed sum, including the technological infrastructure, and its existing management team will join the Farfetch group.
“This will allow Farfetch to significantly accelerate its resale capabilities through the development of key technology and service features such as automated pricing, and faster geographic and category expansion of its resale service, Farfetch Second Life,” Farfetch said.
After the transaction closes, the Luxclusif team will operate the Second Life platform. In addition, Luxclusif will continue to sell pre-owned product it acquires from specialist suppliers and luxury consumers for both Second Life and similar programs it operates for other luxury industry partners.
“Luxclusif joining the Farfetch group allows us to expand the company’s pre-owned offer for our customers, for brand and retail partners and for other suppliers of pre-owned products. We aim to become the leading global platform for pre-owned luxury. The pre-owned market is growing extremely fast and is increasingly important to both luxury customers and to the luxury fashion industry as a whole,” Giorgio Belloli, Farfetch’s chief commercial and sustainability officer, said. “Farfetch’s Conscious Luxury Trends Report 2020 showed that more than half of our customers have bought or sold pre-owned in the last year and industry estimates suggest the pre-owned category is growing three times faster than the primary market.”
Belloli said the deal will help the company accelerate its capabilities and reach in the growing resale market.
Farfetch has been looking more closely at circularity. It operates Farfetch Donate, a clothing scheme in the U.K. powered by Thrift+. In June, Farfetch said it was bringing the donation program to the U.S., working in partnership with ThredUp’s “resale as a service” platform where consumers use “clean out kits” to purge their closets. Whenever a consumer purchases one of the items from the kits on ThredUp, half of the total payout goes to the seller’s choice of charities and whatever is left is converted into Farfetch shopping credit for a future purchase.
And in another move to alleviate waste in the fashion industry, the company started a new pre-order platform, teaming up with nearly a dozen brands and giving customers the opportunity to order designs four weeks before they hit the shelves. Farfetch is also looking at other ways to tackle the problem of unsold inventory, such as a made-to-order model.
“Farfetch is the ideal home for Luxclusif as we seek to scale even further. Together, we are very much focused on growing the resale market through innovation and tailored solutions. Luxclusif’s culture of continuous experimentation and innovation will continue to be nurtured and I am very excited about the potential for creating and delivering valuable turnkey solutions to a growing cohort of global partners,” Rui Rapazote, Luxclusif’s co-founder and CEO, said. “This will allow us to meet our goal of becoming the preferred partner for luxury brands and retailers through leading market innovation and the implementation of data backed solutions within resale.”
“Farfetch and Luxclusif share a vision of a cleaner, conscious, circular and inclusive fashion industry and we are also aligned as tech enablers and industry leaders in our fields. We believe that we now have the opportunity to be the global leader in resale technology by joining Farfetch, with its size, reach and recognition within the fashion industry,” Guilherme Faria, Luxclusif’s co-founder and chief operating officer, added.
The luxury resale platform is no stranger to Farfetch. The two have worked together for a number of years, first through Farfetch’s startup accelerator program and most recently through its Second Life resale service. Currently, Luxclusif is the provider of the Second Life platform in Europe to authenticate, price and then sell pre-owned handbags submitted by customers in exchange for Farfetch credit.
With many irons in the fire, Farfetch also operates Browns and Stadium Goods, as well as New Guards Group, a platform for the development of global fashion brands. Its Luxury New Retail initiative offers consumer-facing enterprise-level options such as Farfetch Platform Solutions (FPS) and innovations such as Store of the Future, a connected retail solution.
Last month, Compagnie Financière Richemont S.A. said it was in advanced talks to sell a minority stake of its money-losing Yoox-Net-A-Porter (YNAP) business to Farfetch. This came a year after Richemont, Farfetch and Alibaba Group Holding Ltd. joined forces in a $1.15 billion strategic partnership, with the aim of giving luxury brands access to China’s consumers, while at the same time accelerating the sector’s digitalization. Should a deal be finalized, Farfetch could possibly leverage its FPS infrastructure to power Richemont’s maisons and YNAP, and even include the participation of Richemont’s maisons on Farfetch’s marketplace.