Luxury brands face rising competition from the secondhand boom

[Two young women looking at clothes in a vintage clothes shop]
Alistair Berg/DigitalVision via Getty Images

Luxury resale platforms are growing faster than the primary market, forcing major fashion houses to rethink how they win back customers, according to The Wall Street Journal’s “Heard on the Street” column.

Sales at The RealReal (NASDAQ:REAL [https://seekingalpha.com/symbol/REAL]), the world’s largest online luxury reseller, have climbed about 10% on average over the past 18 months, with its share price more than tripling in a year. Fashionphile , another major resale site, reports similar double-digit growth in 2025. In contrast, sales of new luxury goods at leading European brands have been flat for six straight quarters.

Even as LVMH (OTCPK:LVMHF [https://seekingalpha.com/symbol/LVMHF]) (OTCPK:LVMUY [https://seekingalpha.com/symbol/LVMUY]) (NEOE:LV:CA [https://seekingalpha.com/symbol/LV:CA]) posted a modest 1% sales rise in the third quarter, lifting investor hopes of a rebound, the broader sector faces a shift in consumer behavior. Once viewed as complementary to luxury retail, the resale market is now a direct rival. Shoppers who used to sell old items to fund new purchases are increasingly reinvesting that money into more pre-owned pieces instead of buying new.

This shift is led by Gen Z and millennial consumers, whose spending on new luxury goods fell 7% and 2% respectively in 2024, according to Bain & Co. They still favor prestige brands. Louis Vuitton, Chanel and Gucci (OTCPK:CFRHF [https://seekingalpha.com/symbol/CFRHF]) (OTCPK:CFRUY [https://seekingalpha.com/symbol/CFRUY]) dominate resale wishlists, but higher prices and economic uncertainty are pushing them toward cheaper, secondhand options. Bain’s Claudia D’Arpizio notes that enthusiasm for luxury labels remains strong, but fewer shoppers are willing to pay current retail prices.

The global market for used luxury goods reached $56 billion last year, nearly triple its size a decade ago and roughly equal to all luxury sales made through department stores worldwide. Resale pricing transparency is reshaping shopping habits: many customers now check secondhand values before buying new, rewarding brands that retain value, such as Louis Vuitton and Bottega Veneta, and discouraging purchases of those that depreciate quickly.

While most luxury houses are hesitant to launch in-house resale operations due to logistical and brand-image challenges, they are watching the market closely. Data from resale platforms increasingly guides design decisions. A surge in demand for Chloé’s (OTCPK:CFRHF [https://seekingalpha.com/symbol/CFRHF]) (OTCPK:CFRUY [https://seekingalpha.com/symbol/CFRUY]) Paddington bag, whose secondhand price jumped from $217 to $724 within a year, prompted the brand to reissue it. Louis Vuitton (OTCPK:LVMHF [https://seekingalpha.com/symbol/LVMHF]) (OTCPK:LVMUY [https://seekingalpha.com/symbol/LVMUY]) (NEOE:LV:CA [https://seekingalpha.com/symbol/LV:CA]) and Balenciaga (OTCPK:PPRUF [https://seekingalpha.com/symbol/PPRUF]) (OTCPK:PPRUY [https://seekingalpha.com/symbol/PPRUY]) have made similar moves, reviving older handbag lines to capitalize on renewed interest.

The resale boom offers valuable insight into consumer tastes, but also a challenge: luxury labels must convince shoppers that new is still worth the premium, the Journal reported.

MORE ON LVMH MOËT HENNESSY - LOUIS VUITTON, SOCIÉTÉ EUROPÉENNE, THE REALREAL, ETC.

* LVMH Moët Hennessy - Louis Vuitton, Société Européenne (LV:CA) Q3 2025 Sales Call Transcript [https://seekingalpha.com/article/4829920-lvmh-moet-hennessy-louis-vuitton-societe-europeenne-lv-ca-q3-2025-sales-call-transcript]
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