The Future Of Fashion Is Recycling The Past, But Is It Good Business?

Three brands prove there is money in catering to niche, unique identities and not just mountains of badly made mass-market knock offs. Meet this decades retail rock stars who don’t actually buy any stock.

INA

Ina Bernstein, owner of the New York based consignment retail chain INA, opened her first store in Manhattans Nolita area in 1993.  With a background in contemporary merchandising, Ina was the first to make consignment shopping cool. She now has 5 stores, a thriving international eBay business, and a combined annual turnover of $4 million – without buying any inventory.

GL: Consignment stores have had a good time during the recession, people selling and buying less expensive designer clothes – do you think it will stick?

IB: I opened the first store 17 yrs ago when things were good, and got so much merchandise, so it’s not directly connected. We now have 5 stores and plan to open more. We’ve benefited from the recession because so many new consigners have realized it’s a good way to make money.  60% of our merchandise has never been used by people in the fashion business or celebrities who get clothes for free and sell them with us, which means we often have the same thing at the same time as contemporary designer stores, for less.

GL: There’s a lot of talk about slow fashion, people buying fewer but better clothes – have you found this to be true?

IB: Yes, I have people who have been consigning for 15 years but because of the economy are selling less and keeping more quality stuff for longer. They feel good wearing it another year, where in the past they would replace it. People are proud to shop consignment, it used to be a dirty secret that they wouldn’t tell their friends and now they brag about it – an effect of the massive umbrella of gloom, but it is lifting in New York, people are shopping again.  We’ve had a very good year, just a little down from last year.

GL: Who is your typical customer? You recently upgraded the men’s store – are more men converting to consignment shopping?

IB: We get a lot of fashion people from Milan, Paris etc. Just in the way they come here and go to Jeffrey, Barneys or Century 21 they come to INA – we’re on the fashion map. We don’t sell clothes that are conservative, so these are people who know how to put themselves together and who know what they like – getting something great at a better price. [On being green]…. If people really cared about the planet they wouldn’t be wearing designer clothes, but it is in their consciousness somewhat.

It took 4 yrs to get enough men consigners to make it worthwhile. We get 1/3 of the volume of clothes we do from women.  Men tend to wear things to death before they replace it, which is what we wont take.

GL: You have 5 stores. What’s your stock turnover?

IB:  We have 100’s and 100’s of regular consigners and 6-8 people consigning every day, with 3-50 items each, which we tag and put out – the store gets refilled very quickly all week. Sometimes we get big shipments of 50-100, which can mean $20k to us. After Sex and the City ended [Patricia Field bought from INA for the show], HBO emptied the wardrobe and held a one day Sex and the City sale with us.  In one day we made more than we ever have in a month.

GL: What’s your pricing strategy, how do you determine what to charge?

IB: Our staff knows fashion, and price depending on what collection and designer it’s from and what it’s being sold on eBay for. We take 60% of the resale price. There were only 3 consignment stores when we opened and now there are about 30, so it’s important to be good to our consigners – from a fashion retail perspective, they’re our designers.

INA NYC

GL: You don’t take returns?  Do you think people are more willing to accept that with the rise of resale culture?

IB: People are more willing, it’s accepted policy in consignment shops, but there’s maybe not the same degree of indecision when buying consignment because there’s an excitement about getting a one off at such a great price.

GL: What do you think is the future for pre-owned fashion?

IB: It has a great future because it makes so much sense for everyone, the business, the customer gets value and consigners get money. We’re growing at a very nice pace, lots of people want us to open in LA, Paris and Milan, but we’d need an investor to make it happen. We’re not unhappy with how things are.

1st Dibs

Michel Bruno launched 1st Dibs.com in 2000, a media brand and retail portal dedicated to “The most beautiful things on earth”, and unique access to the world’s leading dealers who sell them.  What started out as a marketplace for antique, mid-century modern furniture dealers, now includes haute couture and luxury vintage fashion, (think vintage fashion porn for serious collectors.)  Growing 50% each year since it launched, and 40% last year, 1 million people, (I suspect mostly furniture fans,) visit 1st Dibs each month. The question is, can vintage fashion online be an equally scalable business?

With 100 items sold a week at an average price of $2,300, income from media sales, dealer fee’s, no outgoing cost for inventory, 200 dealers a month asking to join, zero debt and an offer to sell for $250 million, you do the math’s.

RARE

GL: The vintage clothes you sell are very expensive, how has that worked out for you during the recession?

MB: Our first objective is to gather most beautiful things on earth first and foremost, [like $50,000 for vintage YSL] and business is up 40%. Dealers have had a hard time but lots say they’re getting significant business from our online market.

GL: There’s a lot of talk about slow fashion, people buying fewer but better clothes – have you found this to be true?

MB: People like the idea of having something that other people don’t have.  Being able to standout as someone who isn’t run of the mill is important, and as more things are mass produced, it’s more important to buy something different – and you don’t buy vintage to wear it once.

GL: Who’s a typical 1st Dibs customer?

MB: The customers on 1st Dibs don’t shop on eBay, they’re millionaires and celebrities.
What has been lacking in the vintage/collectors business is modern marketing.  We help them [dealers] become a known brand nationally.  It grows their business from people buying, and people who want to sell to them – it’s a huge outlet for purchasing.  We moved the [vintage fashion] model into the 21st century.

GL: With 1 million visitors a month, what % converts to actual customers?

MB: We’re a marketing media company that provides a modern form of advertising for them [dealers pay a monthly $500 handling fee.] People don’t necessarily know the sale came through 1st Dibs.

GL: How do you control the quality and quantity of inventory when your model relies on other retailers to provide stock?

MB: The dealers dictate what is popular before it hits the site – right now it’s the 80’s.

Claire Watson curates the sites and reviews the inventory each week with the dealers, but if you click through to the dealer’s own pages within the site, they can sell anything they like.

get DRESSED

GL: Will fast fashion slow down?

MB: No, it will probably be more so that way. They [fast fashion retailers] are looking for a way to get people to react – they show up, they buy, in the same way Gilt Groupe is based on getting people to react to limited period sales.  I think people in the fashion business are going to find ways to keep profits and not give it to department stores, or the Gilt Groupe.

1st Dibs has been selling vintage clothing for less than a year, so it will be interesting to see if people revert back to buying contemporary brand uniforms or whether the recession really has inspired us to be more discerning and invest in lasting creativity. INA proves you don’t have to buy stock to be a successful retail brand, but how do these resale businesses stack up against comparable contemporary retail?

Farfetch

Farfetch.com was born from the firm belief that there is a great future ahead for independent fashion boutiques and also for the smaller, more creative designers they support and nurture.  Farfetch owner, Jose Neves, operates a similar model to 1st Dibs, what he calls the ‘third model’, offering a unique range of, unworn, designer labels through a network of independent boutiques in Europe and America.  With over 500,000 global visitors a month, Farfetch also proves that selling niche, unique identities, without actually buying any stock is good business.


farfetch

GL: The clothes and accessories you sell are expensive, how has that worked out for you during the recession?

JN: We wondered, before launching, which items would sell best and we found the high price tags are doing pretty well, which was somewhat a surprise for us.

GL: You aggregate stores from across Europe and now the States, how does the exchange rates, taxes and shipping costs that you pass on to your customers affect the business?

JN: Obviously, it would be much more user-friendly if all these issues did not come to the equation. However, we offer a unique mix of designers and products and that is often what our customers are looking for.

GL: There’s a lot of talk about slow fashion, people buying fewer but better clothes – have you found this to be true?

JN: Yes, we believe that to be the case, at least at farfetch.com.

GL: Who is your typical customer? Do you think business in America will be any different than in Europe?

JN: We have a very eclectic mix of labels and the same goes for our customers. Our client base is spread out all around the world. The UK, by far our largest market, is less than one third of our sales. We think Americans are more used to very low shipping costs and therefore they will prefer to buy from our US boutiques, which should make our business in the US increase significantly.

GL:  Why do stores choose to be part of FF rather than operate their own e-commerce sites? After commissions and fee’s, is it really more cost effective for them?

JN: The main problem a directional designer faces is building a network of supporting independent retailers so they reach a global audience. Many designers, like Bernhard Wilhelm, to give an example, have a global audience, but are stocked in very few stores around the world. And the other problem for independent boutiques these days is the pressure that the “big boys” of the high street, the department stores and the huge e-tailers, are putting on them.

LAB

So we have, in one hand, a global demand for unique style, but in the other hand an ever-increasing number of hurdles to make both ends meet. We believe the Internet is the best vehicle to “solve this riddle” and make, for the first time, unique and directional style available to a global audience, helping boutiques and designers gain some of the lost ground that the current fashion distribution model took from them.

Practically all our partners have enjoyed a big commercial success as part of their partnership with farfetch.com. Some of our partners are selling £2,000 of merchandise every day. For a small store, this is a very significant turnover — sometimes greater than what they are able to do in their stores. For many of our partners, their experience with farfetch.com has overwhelmingly surpassed their initial expectations.

Next month, I’m having a go at the future of vintage fashion.

In the meantime, please buy less, choose well and support independent retailers.

Gill writes about the business of fashion for Mpdclick, a leading commercial online fashion trend forecasting service. To discover more, please visit www.mpdclick.com. As well as being a freelance brand strategist and writer, she is the co-founder of The Joneses, a creative brand and communications company in New York. You can contact Gill at gill@thejoneses-nyc.com

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