Vestiaire Collective: The Challenges of Second-Hand Luxury

This case illustrates solutions to a) the vexing problem of how to stop counterfeit luxury goods from being sold on the Internet; and b) the larger issue of how to sell lots of pre-owned personal luxury goods without fear of undermining their lofty prices. When the “fake luxury goods” problem first appeared in the mid-2000s, brands like L’Oreal, Hermès and Tiffany responded by taking one of the biggest online marketplaces, eBay, to court. The big brands won millions in damages and dragged eBay’s name through the mud for years to come. But on the sidelines were three different sets of entrepreneurs, almost all French, who saw in this scandal the opportunity of a lifetime. Separately they launched three competing digital platforms where pre-owned luxury products can be bought and sold on the condition that they are fully authenticated by experts. While all three are still in business, the company that started with six co-founders has been the most successful. This case examines the role of all six people and why eight years later the two “techies” were able to leave the company on good terms.

The case can be taught in executive education and elective MBA courses in luxury management, organizational behavior and entrepreneurship. With the case, instructors can focus on a wide range of issues related to both the sourcing and distribution of second-hand personal luxury goods within a global market. When sellers first offer goods for sale on the Vestiaire Collective platform, curators take them through a number of steps to ensure that the products are suitable for inclusion in the catalogue. Matching supply with demand is a key variable of success in this business, since fashion products have an especially unique set of characteristics that vary from one region to another, from one designer to another and from one epoch to another. Once a purchase is concluded, curators then ascertain if the actual product conforms to the seller’s description and is a genuine item. Creating trust among customers is also an absolute necessity in this business. In sum, instructors can use the case to discuss the essentials of business and management in an easily accessible setting.