Fashionphile, a San Diego-based resale platform that specialises in luxury handbags and accessories, has acquired LXRandCo, Inc., a smaller Canadian player in the resale space that filed for bankruptcy last month.
As part of the deal, Fashionphile, which counts Neiman Marcus as a minority investor, would purchase LXR’s remaining inventory of designer handbags, intellectual property, as well as its connections with retail partners as a supplier of secondhand products.
For instance, LXR sold resale inventory to department stores Lord & Taylor and Century21 before they respectively shuttered in 2020. Another example of a secondhand wholesaler is What Goes Around Comes Around, which provides vintage luxury accessories for dozens of Dillard’s stores across the US. Le Prix, a solely B2B platform that connects secondhand suppliers in Asia and other markets with consumer-facing retailers, is also a prominent player in the resale wholesale space.
With a new stable of supply as well as relationships with retailers interested in stocking pre-owned products, Fashionphile will enter a new phase of growth by tapping into the very fragmented B2B market for luxury secondhand goods, according to chief executive and co-founder Ben Hemminger.
“The assets from the sale were an opportunity to take a first step in our journey into wholesale,” he said. “We can capture a certain amount of market share in our own direct-to-consumer [platform] but there’s so much more opportunity when you expand into other channels.”
Right now, Fashionphile sources its products directly from consumers trading in their pre-owned pieces for cash. But this supply has outweighed the demand for it on Fashionphile.com. Selling these items elsewhere — such as department stores, boutiques and big e-commerce marketplaces — would be a lucrative solution.
“Right now, we turn bags away bc we’re over-inventoried online,” said Sarah Davis, co-founder and president of Fashionphile. “But if we serve other channels, we can take in whatever we want.”
While the LXR sale provided the initial boost of inventory for Fashionphile’s entry into wholesale, the company plans to source the vast majority of its future wholesale inventory from their consumer sellers.
Fashionphile already works with a number of independent consignment stores as a supplier. Later this year, it plans to open its first two pop-up locations in California.
BoF Insights | The Future of Fashion Resale Report
BoF’s definitive guide to fashion resale, covering the evolution of the market, its growth and upside, consumer behaviours and recommendations for crafting a data-driven resale strategy.