Sustainable fashion: closing the circle
Renting, repairing and reselling goods is in vogue but second-hand trade cannibalises primary sales
The fashion industry has long struggled with ethics and sustainability. Fast fashion is wasteful at best, exploitative at worst. Luxury is not always a great deal better: recall Burberry’s bonfire of out-of-season clothing to avoid it turning up on the backs of budget shoppers.
Selfridges wants to right the balance. The UK department store follows in the footsteps of Hong Kong peer Lane Crawford, online luxury merchant Farfetch and French fashion house Chanel, an early mover in ditching crocodile-skin bags.
What Selfridges offers is vague. It mostly amounts to certification for materials in its products, spanning feathers to cotton, by 2025. The retailer will also embrace “circularity”, the new buzzword for goods that are rented, repaired or resold rather than dumped.
Reselling is the easiest to carry off. Online merchants like Vestiaire and peer-to-peer reseller Depop have made entire businesses out of it. Others have embraced extra business, such as Farfetch, which reckons the luxury resale market is worth more than $24bn and growing four times as fast as primary sales. Second-hand goods appeal to bargain seekers and eco-warriors alike. Making a new pair of jeans and T-shirt can use up to 20,000 litres of water, according to UK NGO Waterwise, enough to grow 70kg of potatoes.
By providing resale sites, manufacturers and retailers are able to take a cut of revenues and gain access to fresh troves of data. Still, second-hand trade cannibalises primary sales and data gleaned is harder to act on. Spotting a rerun of the craze for Fendi’s baguette may encourage high street stores to sell lookalikes, but those after originals will probably stick to vintage bags.
Investors appear to like the circularity model. Vestiaire raised $64m in April. Zalando’s share price is up by more than two-thirds since it unveiled plans to enter the second-hand market in late February. But investor fashions are fickle too. The pandemic’s lockdowns have scythed retail sales: Selfridges itself has slashed 450 jobs. Resales squeeze margins. Circular fashion does not mean circularity of profits.