RESALE - Being taken seriously by Big Retailers

RESALE - Being taken seriously by Big Retailers

#resale #circulatiry #circularfashion

H&M is getting into resale. The site, H&M Rewear, is scheduled to go live on Sept. 7 in Canada, the company told BoF. If successful, the retailer would consider expanding the concept to other countries.

The fast fashion behemoth joins a rapidly growing list of traditional brands and retailers embracing the second-hand market. In July, Madewell announced it has extended a partnership with ThredUp to create the Madewell Forever program, which allows shoppers to trade in their pre-worn jeans in exchange for store credit. Last week, British department store?Harvey Nichols said it will launch a resale service ?for its customers, teaming up with backend tech provider Reflaunt — the same firm that’s working with H&M on its marketplace.

It’s a sea change for the fashion industry, which until recently viewed resale as competition for new clothes at best, and a source for?counterfeits ?at worst. But consumer demand for second-hand clothes is soaring, and the biggest resale sites are now worth billions of dollars. This year alone, ThredUp and Poshmark, two of the biggest second-hand platforms, staged initial public offerings, and the youth-focused?Depop was acquired by Etsy ?for $1.6 billion.

Brands and established retailers too are carving out a slice of the pie, often relying on third parties to handle the tricky technology and logistics involved. Most aren’t looking to turn resale into a major part of their business, or in some cases even to turn a profit. Instead, they see second-hand as an additional service they can offer customers who are shopping resale sites anyway (ThredUp lists 48,000 H&M items for sale in its women’s section alone). An in-house resale option can also attract some new shoppers, and it’s an opportunity for brands to signal that they prioritise sustainable fashion, though some critics question whether second-hand sales are helping the planet.

“For some retailers, resale may simply serve the value of the ESG (environmental, social and corporate governance) press release, which alone might cover the cost of doing business,” said Simeon Siegel, retail analyst and managing director at BMO Capital Market. ”If it’s bad, if it’s brand-eroding, they should be able to pull back.”

What’s the Actual Environmental Impact?

When brands announce their participation in resale, almost always they take the opportunity to tout their commitment to sustainability. Both H&M and Madewell cite “closing the loop” as the most significant driving force behind their respective resale initiatives. The notion of?circular fashion ?has become a buzzword in the industry, referring to the process of extending the life of a garment. “It’s more about being a better version of ourselves, to promote sustainability,” said Frédéric Tavoukdjian, country manager of H&M Canada.

Resale’s impact on fashion’s carbon footprint depends on two factors: whether it actually leads to a reduction in primary manufacturing, and the additional energy and resources required in the journey of the product from one consumer to another.

In a May study published in the academic journal?Environmental Research Letters, Jarkko Lev?nen of LUT University in Finland found that resale contributes less toward climate change compared with textile recycling and fashion rental, two other methods commonly used to create circular fashion. But that was only true when the availability of second-hand clothing replaced the need to produce new apparel.

“Extended use does not automatically mean that the user’s collection of clothes remains the same, nor does reselling automatically lead to increased use time,” Lev?nen wrote. “It may be that people buy extra clothes from second-hand shops simply because of their cheap price. This type of activity does not have any effect on primary production.”

“What we’re not seeing in all of these announcements about circularity and resale is the work that actually needs to be done in the factories themselves that are producing these garments,” said Bédat. “And if they’re not looking at [resale] as a way to cannibalise their own sales, then it is just sparkly stuff.”

Resale advocates respond that the positive impact will come when the second-hand market is a larger portion of overall apparel sales. For Madewell, the Forever program is the start of what could be a much larger resale push, according to Wadle, who said she hopes these efforts will one day enable the industry to produce less overall. For now, resale is still in an exploratory phase. “We will be looking to expand into other product categories, not only in Madewell but across the whole [J.Crew] group,” Wadle said.


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