How Luxury Fashion Brands are Devaluing the Resale Market

As a lover and buyer of high-end luxury, which extends beyond bags, shoes and accessories, I have learned much from being exposed to the people and practices of the industry. While I admit that I will never have the same insight as someone working directly for these luxury brands, I have gleaned enough information over these last few years to understand that many common practices are hurting the resale of full priced purchases made in boutique.

Gifting to influencers, celebrities and those in the fashion industry

My first point is that brands ruin the resale market by pre-releasing seasonal products to bloggers, celebrities and others of note in the industry. You only have to scour sights like Vestiaire Collective before a big Dior or Chanel collection is about to launch, to catch glimpses of designer items not yet obtainable in boutiques for sale on the site. More often than not, they will be priced significantly below retail, despite not even being available in store. If you want to know the reason why this is possible, it’s due to those of influence in the fashion industry reselling the pieces that have been gifted to them by the luxury fashion houses. They have probably worn the item once for an Instagram post or fashion show and then for some quick, easy cash they sell their “gift” online.

Whether or not this is frowned upon by the high-end brands I don’t know. The problem regardless is that it happens, and it instantly devalues the marketplace for clients who have paid full price. Not only that, it makes that hyped up item you’ve been lusting for feel instantly cheapened. You cannot compete with someone who is willing to sell his or her luxury item for next to nothing because they were given it for free. This means that those legitimately needing to sell a current season item (e.g. it’s a gift, regretful purchase, doesn’t suit after alterations etc.) may be severely undercut.  While it’s all good and well for luxury houses to use those with influence to create hype around a product or collection, instead of gifting pre-release items they should be loaning them out and paying the influencer for their services. Or if the item is gifted, the house should ensure that the items cannot then be resold. Turning a blind eye to this resale market is extremely wrong in my eyes to the paying clients who support the luxury industry and keep the RTW collections alive. As a side note, I would also like to mention that it’s not always the influencer’s fault for needing to sell a gifted item. Brands are so happy to exchange products for services, but rarely do they adequately compensate a talented influencer in money for their time. Last time I checked, a designer t-shirt or shoes do not pay the bills. This will be an interesting topic to elaborate on in the future.

 

High End Fashion House “Staff Sales”

Another practice that dilutes the resale market is staff sales. Again, you only have to do a simple search on eBay or Vestiaire Collective to find many RTW items and bags being resold by the workers of luxury fashion houses. Staff members of designer brands enjoy a considerable discount on pieces that are many seasons old. For Chanel I’m guessing this is over 2 years old, as in Australia that’s the time when items go on 50% clearance and never return to the boutique. While I'm uncertain about the specifics, I can safely theorize that those privy to the staff sales enjoy significantly more than 50% off. In fact, since posting this article I received a DM on Instagram where I was informed that the discount for those working under the LVMH group is a whopping 80-90% on RTW and certain accessories. Seeing as those privy to the staff sales can purchase their pieces so inexpensively, they can then afford to sell their items for a pittance (and still make a profit!). I’ve definitely seen and heard of this this happening online and it's insulting for clients paying full price for these same pieces. With such people diluting the market for a quick and easy sale, it becomes quite challenging to obtain a fair price on a RTW item or seasonal bag you have grown out of love with. I will end this point by saying it blows my mind that some staff, especially those in senior positions or who have been with a company for many years, may actually have better collections than many clients. Just imagine that next time your SA is serving you!

Also seeing as I am very familiar with Chanel, I thought I would share a few tips on finding staff sale items. The method for identifying staff clearance items may vary depending on the country it was purchased from, however commonly you may see the RTW label removed, partially removed or crossed out in black permanent marker. For bags, they may come with no authenticity card and/or have the hologram blanked or removed. Some may even have the leather stamped with a unique code, so that if it surfaces online, the culprit can be identified by head office. This is basically a feeble attempt to deter resale of staff discounted items, however the reality is that these methods aren’t 100% foolproof.

 

Oversaturation of the market

One thing that draws many people into making luxury fashion purchases is the fact that their item will be limited and special. As the years and seasons go by though, I’m finding that a lot of fashion houses are becoming repetitive, lazily changing a few minor details on pieces from last season. Recently for example, I saw a rather specific looking fringed jacket creation for Chanel’s Paris Cosmopolite range that looked like it was exactly from Cruise Cuba, which was only two commercial collections ago. Another real and more personal gripe were the aviator sunglasses from the Chanel Airlines Collection. I loved the design, and being told that they were super limited and only a seasonal runway offering, I bought all of the 3 color variations. Then just a month ago, over a year after purchasing them, I see that they have become a more permanent offering being sold at David Jones. While that alone is disappointing, to add insult to injury they were retailing for $200 less than what I paid in the Chanel boutique. If I had have known that they were going to become some sort of mass-produced piece, I wouldn’t have bothered with them. Now they are virtually like every other common piece of Chanel eyewear that is at every sunglasses store. It is over saturation like this that really destroys the resale market. It undermines the rarity and uniqueness of a special item, thus decreasing its value. Even worse, it also creates buyer complacency. If 10 of the same items are up for resale online, people are more likely to wait around to see whether further discounts will be applied. It makes it so hard for someone to sell a piece they no longer want, and as such they have to take a huge hit if they want it gone quickly.

 

Seasonal sales

Finally my last point is that the sales, which we so love and adore, also hurt the second hand market. There is no greater burn than seeing an item you paid full price for being flogged off at 50% clearance. While not all items make it to sale, for the ones that do people will often expect to pay less than 50% when searching for it on the resale market.

 

As I have come to realize the full extent to which these brands are damaging the resale market, I feel less and less inclined to purchase their full priced seasonal, trendy or collector products. If anything now catches my eye I will be keeping an eye out for it on the second hand market.

 

Share you thoughts below as I and many others would love to hear them!

 

Adrianna is wearing

Chanel Paris in Rome Pre-Fall tunic dress, belt, bag and snake mules.

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34 Comments

  1. July 16, 2017 / 23:36

    You are so stunning, carina! Nice photos and I love the black and white heels!

    Madame X
    The Flower Duet

  2. Miri
    July 17, 2017 / 04:50

    WOW, I love Chanel but can’t afford to pay full price for a new product. As there are many consignment stores in Geneva, I can easily purchase a handbag for a more affordable price. But it is not a handbag that was never worn. 99% it looks practically new as it was not worn much. But I have never heard of Staff sales, etc. It really does not make sense to pay full price when you know as much as you do. Thank you for sharing, Adrianna. And I really love your top and Chanel handbag. You look stunning.
    X
    Miri
    http://currentlywearing.com

  3. July 17, 2017 / 08:22

    I am going to have to come back to this article.
    I think you are right – being able to sell my designer stuff second hand actually means I am able to go to the boutique and pay full price for something.
    So of course I would like the brand to try to help and not devalue the resale market.
    I have actually never been privy to any Chanel staff discounts or discounts at the boutique whatsoever.
    I have however been the first in before anyone at the Burberry store.
    So I can see it would probably work the same way.
    Kiri
    Set to Glow
    http://www.settoglow.com.au

  4. July 17, 2017 / 20:56

    What a interesting read!
    Loved the article I didn’t know half this info on what goes on behind the scenes very informative.
    I’ve had designer items that I don’t wear anymore sitting in my closet because I know I won’t sell them for anything decent so I just don’t bother.
    Yes it’s Annoyingly true what your saying about limited edition runs and exclusive to then see it everywhere.
    Xo,
    Natalia k

  5. July 17, 2017 / 21:55

    Such an interesting and thought provoking post. I definitely think the resale and preloved market is changing luxury end of the industy. I very rarely buy in boutique these days xx

    http://www.thatnewdress.com

  6. July 18, 2017 / 01:11

    Another enlightening post. Thank you Adrianna. I don’t buy a ton of designer brands but will keep this in mind when I do. Let’s talk about your outfit. You look so chic. I adore this entire look. Simply fabulous.

    Xx
    Nikki
    http://www.nikkilivinglife.com

  7. July 18, 2017 / 02:51

    I feel you about gifting to bloggers. I understand that social media influencer marketing is important, but by doing this the luxury brands will lose its classic, aka brand value like you said. Love your look girl!

    http://www.thequinoxfashion.com

  8. July 18, 2017 / 12:15

    Rocking this look! The belt around the waist adds a lovely touch of detail.

    Vivian | LIVE . IN . LOVE
    IG | @viviyunn_

    ~

  9. Whitney
    July 18, 2017 / 12:33

    Hey bb thanks for sharing. Everything you’ve mentioned is unfortunately true. It definitely leaves a sour taste in your mouth especially when you’ve paid top dollar for something that later on goes on sale. I also deter from mass-produced pieces and only go for limited editions but again I have to choose carefully because it may reappear on the market (very much like the Chanel sunnies experience) or pop up online! You already know this but these pictures are part of my “Mimamochi favourites” (I like the last one the most!) 🙂

  10. July 18, 2017 / 17:22

    Good written piece, I hadn’t experienced it like this before. Love your bag btw!

    xx

  11. July 19, 2017 / 00:53

    This was such an interesting post! I never actually thought about the luxury industry this way.

    PS love that top!

    -Ashley
    Le Stylo Rouge

  12. July 19, 2017 / 06:45

    I love this informative post. I had read about Chanel trying to flag and prevent resales of their bags, but to be Frank in a time of fast fashion and changing tastes, people who spend good money to buy a luxury item should have the right to do anything they want with it, including resell it. It’s absolutely absurd to me. I was also disappointed to read about Chanel no longer helping to repair or care for your bag after you’ve had a bag for 5 years. No other luxury house would turn me away. I brought my Valentino into the Rodeo Drive store in Los Angeles and no questions asked, they took it for repair immediately.
    I understand their desire to gift goods to bloggers to hype up an item. Vintage or used unfortunately often come down in value a lot like vehicles do. Only the rare pieces really retain its value and most others drop a lot, which is a shame. I think this causes more people to turn to dupes as retail prices rise and resale value falls so steeply.

    Xo,
    Miki
    http://mikialamode.com

  13. July 19, 2017 / 07:20

    This is such an interesting piece because high end brands’ items are usually thought of as timeless, although you’re so right that they’re also so seasonal. The influencer impact on the fashion industry and marketing as a whole is so frustrating to me but also really interesting to watch. Thank you for sharing!

    🍍 Pia
    http://gymbagsandjetlags.com

  14. July 19, 2017 / 15:52

    It does suck to see the pieces that you so dearly love are under valued in the market by staff discount. But that Chanel perfume bag! DREAMY! 🙂

    Hint of Grey | http://www.hintofgrey.com | Petite Fashion Blogger

  15. July 20, 2017 / 07:33

    I learned so much from this post today. I had no idea that staff sales could be so significant. I never thought there would be an issue with re-sale of luxury goods because I always see my Chanel bags on sale for way more than I paid for them on second-hand sites? Maybe because they are older and classic models so they have appreciated in value over time? I’m not quite sure.

    xoxo
    Rina Samantha
    http://www.andshedressed.com

  16. July 21, 2017 / 13:46

    I love your outfit
    Style to Love

  17. July 23, 2017 / 05:16

    These are some great points. I haven’t resold anything online (because I’m kind of lazy haha) but I do appreciate that some people have an unfair advantage. I especially hate when there are designer collaborations (i.e. with Target) and people hoard the product and sell it for a premium on eBay later. It’s not fair to people who actually want to use the product and pay a fair price.

    xx Yasmin
    http://banglesandbungalows.com

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