Neiman Marcus Group on Wednesday announced it has agreed to acquire a minority stake in Fashionphile, an e-retailer selling pre-owned "ultra-luxury" handbags and accessories, for an undisclosed amount.
Customers can bring items to select Neiman Marcus stores to get a quote from Fashionphile, and can use any payments they receive in trade to shop at Neiman Marcus, according to a press release from the companies that was emailed to Retail Dive. Pre-owned merchandise will continue to be sold exclusively through Fashionphile.com.
Founded in 1999, Fashionphile says it offers one of the largest inventories in pre-owned luxury items, "best-in-class authentication" and a direct buyout model, rather than consignment. The company is profitable "and poised for growth," according to the release.
Neiman Marcus may be wrestling with over $4 billion in debt, but this investment may be better than the department store even realizes. In its announcement, the company cites resale site Thredup's report that the pre-owned market is "projected to grow to $23 billion by 2023" — but that's old news. Thredup's more recent report found that the segment has already eclipsed that, reaching $24 billion today, and on pace to reach $51 billion by 2023.
The tie-up offers benefits for each enterprise beyond just sales. The two aim to "create an elevated pre-owned experience for their consumers by matching the physical footprint and loyal customer base of Neiman Marcus with Fashionphile's digital inventory of 15,000 ultra-luxury items," according to their press release. The department store also said that, because they have "limited overlap between buyers and sellers in the pre-owned luxury market," the partnership will help Neiman Marcus reach "new, younger shoppers ahead of their peak spending years."
In a statement, Neiman Marcus CEO Geoffroy van Raemdonck said that the department store has learned that more than half its customers already shop second-hand.
"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," he said. "Fashionphile's hyper focus on curating high-quality supply and providing best-in-class shopping experiences makes it the ideal partner," he added.