Monday, May 20, 2024

Vestiare Collective Launches €1 Million Crowdfunding Campaign: ‘Natural Next Step’

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Beloved French secondhand luxury platform Vestiaire Collective has launched a crowdfunding campaign on its road to profitability by the end of the year.

Secondhand platform Vestiaire Collective has announced the launch of a crowdfunding campaign in a move to widen its shareholder base. This campaign, aimed at raising at least €1 million, is inviting individual investors to partake in the company’s growth as it targets profitability by the end of the year and eyes a potential public offering.

“On the back of our continued success, 2024 will be a pivotal year for Vestiaire Collective,” Maximilian Bittner, the CEO of Vestiaire Collective, said in a LinkedIn post. “We aim to continue gaining market share in the global fashion industry and reach profitability towards year end.” Bittner says that through the fundraising, the platform’s customers can take “an even more active role” in helping to shape a more sustainable future for fashion. Founded in Paris in 2009, Vestiaire Collective is on a trajectory to reach profitability by the end of this year.

Bittner says the goal of the crowdfunding campaign is to bring its most loyal customers “into our shareholder base,” a move he says is “a marketing effort to connect with our community.” This initiative, open to individuals over 18 in Europe and the U.K., will be promoted on the company’s website and mobile application, emphasizing its commitment to inclusivity and community engagement.

vestiare collective ad
Courtesy Vestiaire Collective

Vestiaire Collective, supported by Kering, a major shareholder with a five percent stake, has priced the crowdfunding at €1.78 per share. This valuation of €1.1 billion aligns with the company’s valuation during a funding round in November, led by private equity firm Eurazeo, which currently holds approximately 25 percent of the company. Despite a global luxury sector slowdown, Vestiaire has managed to maintain its value, even after being valued at €1.4 billion in mid-2022. “It’s reflective of the current environment but I think it is a fair valuation,” Bittner said, addressing the challenges and opportunities in the current market.

Vestiaire Collective’s growth is evident in its sales figures, which saw a 25 percent increase last year. This surge is attributed to the rising popularity of purchasing secondhand clothing and accessories, a trend that has prompted many leading fashion houses and retailers to establish their own resale platforms. The platform, which has banned more than 60 fast fashion labels including Boohoo, Gap, H&M, Shein, Uniqlo, and Zara, has instead prioritized luxury leaders like Chanel, Gucci, and Burberry. Vestiaire says it prides itself on being a marketplace for “desirable” pre-owned fashion that will retain its resale value.

Vestiaire Collective Earns B Corp Status In Secondhand Fashion First
Vestiaire Collective wants to steer away from fast fashion | Courtesy

A spokesperson for the company shared in an email that an initial public offering (IPO) would be “the natural next step after we reach profitability.” This strategy aligns with the company’s long-term vision and growth plans.

The crowdfunding, facilitated through the U.K.-based platform Crowdcube, opened on Tuesday, with a subscription phase commencing on February 6. This marks a significant step for Vestiaire Collective as it forges a closer connection with its user base and prepares for its next phase of growth.

In its LinkedIn post, the company said that last year it granted shares to all employees, and this year, expanding that offering to include its community was the “natural next step.”

“In 15 years, Vestiaire Collective’s community of fashion lovers has been instrumental in demonstrating that fashion can be consumed more consciously, favoring quality over quantity, and therefore changing the whole industry for the better.”

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