Buying clothes? What’s the resale value?

  • Associated Press
  • Friday, May 9, 2014 3:29pm
  • Business

NEW YORK — Jenna Broems shops for clothes the same way she hunts for a new car: She considers resale value.

Broems, who lives in Stamford, Connecticut, only buys brands like Abercrombie &Fitch and 7 For All Mankind because she believes they will fetch the highest prices when she’s ready to move on.

“I’m now walking in like ‘What’s the return of this? Am I going to be able to resell?’” said Broehms, 38, a teacher who has gotten $2,500 from stuff she’s resold on ThredUP, an online resale site for used clothes.

Americans increasingly are considering the resale value when they shop for everything from jeans to handbags. The habit is in part due to a growing number of web sites that make it easy for shoppers to buy and resell pre-owned goods.

It’s the latest reflection of the tough economy. Buying used goods at consignment shops became popular during the recession when Americans were hurting for extra cash.

The habit has stuck during the economic recovery as people have gotten used to being able to wear the latest fashions without paying top dollar: Just as people lease a new car every couple of years so they’re always riding in style, reselling clothes is a way for Americans to trade up or splurge without spending a lot of additional cash.

The trend also is a consequence of the escalating cost of luxury. Rising prices of designer merchandise in recent years have tested the willingness of even affluent shoppers to pay full price. The price tag of a classic Chanel handbag, for example, is now $4,900 this year, up from $2,250 in 2007.

The size of the resale market is tiny: about 10 percent of overall luxury goods — including clothing, handbags, accessories and home furnishings, are sold in the aftermarket — with about one percent of pre-worn goods sold online, estimates Forrester Research’s Sucharita Mulpuru.

But data suggests it’s a fast growing area of retail: Shoppers seem to have resale value in mind. According to a survey conducted last year by market research firm The Intelligence Group’s Cassandra Report, 44 percent of 900 shoppers between the ages of 14 and 34 think of resale value when they purchase things like electronics, furniture and clothing.

Shannon Dolan, who lives in San Francisco, said she’ll buy a Louis Vuitton handbag over a Gucci one based on how much she believes it will command if she resells it.

“It absolutely changed the way I shop,” said Dolan, who has made $10,000 on online luxury resale marketplace TheRealReal by selling clothes. “I’m really thinking of the value and investment of some of the things I’m buying.”

Resale sites have taken note. The sites marry the discounts found on resale online king eBay with tighter controls. Luxury sites like Portero and TheRealReal, the largest seller of authenticated luxury resale goods with business expected to reach $100 million this year, have staff to make sure designer goods are authentic.

The sites also offer a faster way to sell than consignment stores, where shoppers can wait for months to have items sold and reap no more than 50 percent of the resale price. With the sites, items often sell within days and shoppers get as much as 80 percent of the resale value.

Many of the sites also have their own resale guides. ThredUP is loosely calling it their own version of the Official Kelley Blue Book, referring to the online manual that offers resale values for cars. TheRealReal, which is coming out this summer with a mobile app that’s a resale guide for consumers, said its resale calculations are based on prices of the 450,000 items it has sold since its founding in 2011.

“This is a broad narrative on how people are buying things and using things,” said James Reinhart, co-founder and CEO of ThredUP, which launched as an online children’s swapping business in 2009 and morphed into a resale site two years ago.

Julie Wainwright, CEO of TheRealReal, which focuses on the top tier designer labels in fashion, accessories and jewelry, said her office fields five or six calls a day from customers wanting to know about the resale value of a brand. “People will call us before they shop, or while they’re shopping,” Wainwright said.

And the sites have all kinds of tricks of the reselling trade. For instance, TheRealReal said it doesn’t carry even some higher end brands including Escada, St. John and Max Mara because they’ve been inconsistent or have lost buzz, and thus, don’t command high resale prices.

Conversely, the ones with the most value in pre-worn clothing and handbags are: Chanel, Hermes and Louis Vuitton. In shoes, it’s Christian Louboutin, Wainwright said.

Some analysts say the new focus on resale value could hurt sales at traditional retailers — particularly at luxury stores. “I think luxury retailers are going to run a little scared,” said Marshal Cohen, a market research analyst.

But resale sites say they can help retailers because shoppers are more willing to spend if they know they can easily resale items later. Some even are creating partnerships with traditional stores.

TheRealReal, for example, teamed up with Neiman Marcus, allowing first- time consignors to get a $50 gift card to the store. The resale site is funding the cost. Neiman Marcus declined to comment.

And some shoppers say the sites make them more comfortable about spending money in traditional stores.

Amy Fine Collins, a special correspondent for Vanity Fair magazine, sold a Chanel handbag on Therealreal.com for about $1,000, a few hundred dollars more than she originally paid for it at the store. She had the handbag for about a year.

“I don’t have to get a nose bleed at the prices the way I used to. I know there’s a strong secondary market,” she said.

Sales sites

Shoppers are taking advantage of websites that make it easier to sell and buy gently worn clothing and accessories. Here are a few:

Portero

Niche: Focuses on accessories like handbags and jewelry from top-tier luxury brands such as Chanel, Gucci, Hermes and Rolex.

Therealreal

Niche: The company offers limited time only sales events of gently worn top tier luxury fashions, accessories such as handbags and fine jewelry. It expanded into art last year. Among the 500 brands it carries are Chanel, Tom Ford, Valentino and Gucci.

ThredUp

Niche: ThredUP focuses on mainstream fashion and accessories brands like 7 For All Mankind and Banana Republic for women and children. Recently, it has expanded into higher-end names such as Tory Burch and J. Brand. The company also has handbags.

Talk to us

> Give us your news tips.

> Send us a letter to the editor.

> More Herald contact information.

More in Business

Simreet Dhaliwal speaks after winning during the 2024 Snohomish County Emerging Leaders Awards Presentation on Wednesday, April 17, 2024, in Everett, Washington. (Ryan Berry / The Herald)
Simreet Dhaliwal wins The Herald’s 2024 Emerging Leaders Award

Dhaliwal, an economic development and tourism specialist, was one of 12 finalists for the award celebrating young leaders in Snohomish County.

Lynnwood
New Jersey company acquires Lynnwood Land Rover dealership

Land Rover Seattle, now Land Rover Lynnwood, has been purchased by Holman, a 100-year-old company.

Szabella Psaztor is an Emerging Leader. (Olivia Vanni / The Herald)
Szabella Pasztor: Change begins at a grassroots level

As development director at Farmer Frog, Pasztor supports social justice, equity and community empowerment.

Owner and founder of Moe's Coffee in Arlington Kaitlyn Davis poses for a photo at the Everett Herald on March 22, 2024 in Everett, Washington. (Annie Barker / The Herald)
Kaitlyn Davis: Bringing economic vitality to Arlington

More than just coffee, Davis has created community gathering spaces where all can feel welcome.

Simreet Dhaliwal is an Emerging Leader. (Olivia Vanni / The Herald)
Simreet Dhaliwal: A deep-seated commitment to justice

The Snohomish County tourism and economic specialist is determined to steer change and make a meaningful impact.

Emerging Leader John Michael Graves. (Ryan Berry / The Herald)
John Michael Graves: Champion for diversity and inclusion

Graves leads training sessions on Israel, Jewish history and the Holocaust and identifying antisemitic hate crimes.

Gracelynn Shibayama, the events coordinator at the Edmonds Center for the Arts, is an Emerging Leader. (Olivia Vanni / The Herald)
Gracelynn Shibayama: Connecting people through the arts and culture

The Edmonds Center for the Arts coordinator strives to create a more connected and empathetic community.

Eric Jimenez, a supervisor at Cocoon House, is an Emerging Leader. (Olivia Vanni / The Herald)
Eric Jimenez: Team player and advocate for youth

As an advocate for the Latino community, sharing and preserving its traditions is central to Jimenez’ identity.

Nathanael Engen, founder of Black Forest Mushrooms, an Everett gourmet mushroom growing operation is an Emerging Leader. (Olivia Vanni / The Herald)
Nathanael Engen: Growing and sharing gourmet mushrooms

More than just providing nutritious food, the owner of Black Forest Mushrooms aims to uplift and educate the community.

Molbak's Garden + Home in Woodinville, Washington closed on Jan. 28 2024. (Photo courtesy of Molbak's)
Molbak’s, former Woodinville garden store, hopes for a comeback

Molbak’s wants to create a “hub” for retailers and community groups at its former Woodinville store. But first it must raise $2.5 million.

DJ Lockwood, a Unit Director at the Arlington Boys & Girls Club, is an Emerging Leader. (Olivia Vanni / The Herald)
DJ Lockwood: Helping the community care for its kids

As director of the Arlington Boys & Girls Club, Lockwood has extended the club’s programs to more locations and more kids.

Alex Tadio, the admissions director at WSU Everett, is an Emerging Leader. (Olivia Vanni / The Herald)
Alex Tadio: A passion for education and equality

As admissions director at WSU Everett, he hopes to give more local students the chance to attend college.

Support local journalism

If you value local news, make a gift now to support the trusted journalism you get in The Daily Herald. Donations processed in this system are not tax deductible.