Vestiaire Collective’s strategy for the U.S. re-commerce market is simple: Let the competition duke it out amongst one another.
The Paris-based company is focused on growing the U.S., where it currently has an office of about 10 in New York, selling European-sourced, pre-owned luxury apparel and accessories. It’s a different pitch to U.S. customers from the rest of the competitive set — such as The Real Real or Tradesy — with other online resellers sourcing their product from U.S. sellers. That’s where Vestiaire has an advantage, the company believes.
“What is interesting in the U.S. is that we are the only European player and you have big players in the U.S.,” said founder and chief executive officer Sébastien Fabre, who spoke with WWD last week while in Las Vegas for the Shoptalk conference. “They have all raised new rounds of financing and they are fighting on acquisition costs on Google and so what we do is we just let them fight. We benefit from that because it gives a lot of visibility [to] the re-commerce business.”
About 30 percent of items by prospective resellers of Vestiaire are rejected, with some 4,000 new products posted to the site daily. Once an item is purchased, the seller sends that product to the Vestiaire quality control offices — there’s one in Paris and the other is in New York — where the item is then checked by a team of experts.
“The idea of growing the U.S. is we don’t want to be the leader in the U.S.,” Fabre said. “We need to be in the U.S. to have the marketplace grow. A year ago we wanted to do some M&A in Europe to accelerate the growth but it just couldn’t work because every time we looked at competitors in one market, we [grew] faster than them so there was no reason [to buy].”
The ceo said the company wouldn’t discount a potential merger or acquisition in the U.S. but it’s not top of mind in the near term.
“It’s a bit too early,” Fabre said. “So acquisition maybe, but not now. [We’ll] grow organically.”
The company has the wind to its back after raising 33 million euros, or $37.3 million at current exchange, last year, of which 20 million euros were earmarked for the U.S. expansion. The company is already looking for new office space to accommodate a growing New York staff.
“What we try to be is have this marketplace effect where you have countries that supply, that feed the marketplace, and countries where you have the demand and the U.S. is the demand market,” Fabre said.
The business counts about five million members on its site with 100,000 additions coming onboard monthly, according to Fabre. New functionalities on the backend could launch as early as the summer and the company is once again talking to investors, with the potential of revealing something new in the coming months, Fabre said.
Vestiaire is not yet profitable, although Fabre said earnings aren’t that far off. On a market-specific basis, the core French business is profitable, with the company’s profitability cycle being about four years for large markets and three years for smaller countries.
“We’re growing,” Fabre said. “We’re growing at a pace that is 70 percent year on year since the beginning and want to keep this pace and there are so many countries we want to explore.”
Examples of this would be Asia, which has yet to be tapped, with Fabre citing Japan and Korea with expansion into Asia expected some time next year.
Thus the executive reiterated the company’s stance on profit: “There’s room for growth before profitability.”