Still 75 to 80% of luxury consumers are buyers of new products. But the second hand market is growing strongly and one can choose between e.g. providers like Vestiaire Collective, in which Kering recently took a stake, or Rebelle, Mädchenflohmarkt, Vinted and many others. The Hamburg second hand company Reverse Retail with Buddy & Selly for the purchase and Vite-EnVogue.de for the sales is according to its own information Germany's largest dealer of Luxury Second Hand and even has buying stations and sales areas in Germany's premium and luxury department stores, such as KaDeWe, Breuninger, Ludwig Beck or Engelhorn. 

Why do department stores and luxury department stores allow themselves to carry Second Hand alongside their new goods and how did Reverse Retail manage to introduce its business concept there? Has the market really reached the point where shoppers are not saving up for their own luxury bag, but are buying someone else's old bag? Is it just budget reasons or has the sustainability idea already become so established? What does circularity actually mean in concrete terms and what paths can manufacturers, retailers and consumers take to bring about change in our world of overconsumption?

Alethea Talks met one of the two managing directors of ReverseRetail GmbH, Marcus Schönhart, who left his 30-year career in the fashion industry to bring new creative approaches to the second-hand market.

April 8, 2022

Interview Directory 

ART

Name: Marcus Schönhart

Occupation: Founder, CEO Reverse Retail which brands are Buddy & Selly and Vite En Vogue

Status: Germany's largest purchaser of vintage luxury goods

Where to find: Can be found also in departmentstores like Breuninger.

"An incredible amount has changed in the last few years and in the last 24 months there has been a dramatic shift in that direction - especially with the developments on sustainability."

Mr. Schönhart, how come you decided to enter the second-hand market after your career in the fashion industry? What is so fascinating for you about this business model?

Through Buddy & Selly, we buy about 10% percent of the pieces that still have labels and have therefore never been worn. This shows the absurdity of the consumption that takes place today. There is a need for the industry to reinvent itself and come up with new answers - I find it exciting to be involved in and shape this process of change. I have known the classic fashion business for 30 years and have been involved in all responsibilities from sourcing to retail. Now I am in the still - niche market second hand, where there is a lot of room for reinventing creativity. 6 years ago I joined as a shareholder, at a time when Second Hand was not taken seriously. An incredible amount has changed in the last few years and in the last 24 months there has been a dramatic shift in that direction - especially with the developments on sustainability.

How did you manage to convince premium department stores, including KaDeWe, Breuninger, Ludwig Beck, Engelhorn and others, to carry the Buddy & Selly business model in their retail spaces? Who else are you cooperating with and how does the Buddy&Selly and Vite EnVogue model work in detail?

We have about 100 retail partners with whom we cooperate in Germany, Austria and Switzerland - we are also currently expanding enormously in Italy. In the second-hand market, there are two models - one is the marketplace model, where customers have to photograph, post, sell and ship their goods themselves. 

And there is our model, which is what I call a problem solver. We buy the goods directly and bear the risk of marketing them. Customers can send their goods to our warehouse in Hamburg, where they are evaluated for resalability. This means that the part must meet 3 requirements: It must be included in our trademark register of 650 trademarks. Secondly, the condition of the part must be demonstrably resalable, i.e. the part must not have any holes, stains, etc. 

Our IT - pricing intelligence judges for what price we can resell the item -this is then what our purchase price is based on. The third point is the authenticity check, which has a high value in our segment as a premium and luxury supplier - a process that is carried out in the 4 eyes principle, i.e. by 2 judging employees. We purchase a further part of the goods together with our cooperating retail partners, such as Breuninger, Lodenfrey or Ludwig Beck. The retailer invites his customers and we are on site with a purchasing team. In this case, the customer does not receive money, but a voucher from the retailer - for me, this is circularity taken to its logical conclusion! 

Our partners have a very stringent sustainability policy - and the expectation of consumers is now that such an offer is made.

© Reverse Retail

What would be the practical procedure if someone wanted to sell you a bag?

The local employee is able to assess the bag and make you an immediate offer. This takes place either at one of the purchase events or at one of our permanent purchase stations such as at Breuninger in Düsseldorf or Ludwig Beck in Munich. The customer directly receives a shopping voucher from the retail partner - and in most cases even an additional 5-10% surcharge on the voucher. However, you can also send the part to our head office in Hamburg free of charge. You will receive an offer by email - but we do not enter into negotiations. If the customer agrees, you will receive your money promptly. We photograph and develop the content and texts ourselves - every possible or existing trace of use on a piece is photographed in order to avoid a high return rate and to have happy and satisfied customers. In addition, we offer the possibility to return items if you don't like them or if they are the wrong size, which is generally not available on marketplaces, as well as fast delivery within 24 to 48 hours, which also distinguishes us from marketplaces.

The seller will probably not get the same price as if he sells it himself through a marketplace and takes 2 years. 

You would be surprised. Our price is very similar and is combined with the advantage that he gets rid of the piece immediately and gets his money or equivalent. The marketplaces have fees or there are concierge models that also cost money.

For which customer is Vite-Envogue.de relevant?

We have female customers who can't actually afford premium luxury, or perhaps can't yet afford it, and who have their first contact with luxury brands that they wouldn't otherwise be able to buy. And there is also the strongly growing customer group that consumes with us for sustainability reasons. It is important to have a good assortment - which is the case with premium and luxury fashion, because the product quality is sustainable and has a long life cycle.

Do you give a warranty period?

Since it is a second-hand item, there is no legal warranty period. But in our 60-work return period, you can get a feeling whether the item suits you.

What criteria are used to select the brands?

We have defined about 650 brands in the premium and luxury segment from which we buy fashion, bags, shoes and accessories. We buy both men's and women's brands, because we have found that men have just as much understanding and interest in sustainability. Every six months we review our brand register - but hold our line so as not to alienate our customers. In the case of parts with a lower value, such as an H&M part that is only worth a few euros after use, I don't think it would make sense to ship it throughout Germany, which would be more expensive than the part itself.

Do you have a quota of how many pieces are counterfeits?

We invest money and time in training our staff. The brands regularly change the security features of their pieces. We also have a US technology, for example, that can tell whether high-quality bags are genuine on the basis of their leather or material. With sales of several hundred thousand pieces, we have a rate of 0.02 per cent - comparable to having a fake 50 euro note in your wallet.

"This also has an impact on our channels, because the desirability also applies to the secondary market."

Chanel recently made headlines with price increases and limits on the number of bags to be bought per customer.

Chanel, Dior, Hermes are exceptional brands that have phenomenal development and performance. If they implement price increases without selling less, it means they have done everything right. This also has an impact on our channels, because the desirability also applies to the secondary market. We have bags available that are not available in the shop at all, like the Birkin Bag, which you can find on our sales floors like Breuninger, Ludwig Beck and Lodenfrey. Some customers don't even have the chance to get on the waiting list in a luxury shop and would otherwise never get it.

What are the most sought-after handbag brands at Vite-Envouge.de?

Louis Vuitton, Gucci, Chanel, Hermes and Dior. The second most popular product group is second-hand shoes. Marc Cain, by the way, is our strongest brand in terms of number of items. 

"Starting this spring, we will open a sales area of 50 sqm on the second floor of KaDeWe in Berlin, as well as a buying station - in the midst of the premium environment - unthinkable 3 years ago!"

How do luxury brands view this trend and what are the developments?

You can see from the big retail brands like KaDeWe, Breuninger, Beck, Reischmann or Lodenfrey, with whom we do sales areas, that second hand has established itself in the midst of new goods. Starting this spring, we will open a sales area of 50 sqm on the second floor of KaDeWe in Berlin, as well as a buying station - in the midst of the premium environment - unthinkable 3 years ago! We are now in preparatory talks with premium brands that have their own stores and could also buy and sell second-hand there. I think that luxury brands have to face this issue so that they can position themselves positively in the next generation, which thinks and acts even more sustainably.

What other sustainable trends are there in the fashion industry besides circularity?

Actually, there are not that many approaches, starting at the front of the supply chain, e.g. the use of organic cotton and sustainable production. Besides that, there are recycling processes that make the piece recyclable and finally you are at the circular business.

Do you yourself still understand consumption or is it your business model?

It is a well-structured business, but also a very elaborate, single-part business - we go into the commodity risk without knowing whether we will find a buyer. But we are changing the way fashion is consumed with our business model. I've been in the industry for 30 years and for 30 years I've only known "overconsumption". There was always too much merchandise on the market - every wardrobe is too full. The more often articles are turned over and reused, the less new models have to be produced. This mission drives me.

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Where to find Buddy & Selly and Vite-EnVogue:

Online

buddyandselly.com

and

Vite-EnVogue.de

German influencer and style icon Cathy Hummels in Vite En Vogue campaign  © Reverse Retails

©Reverse Retail