Circular Assets: How SMCP is regaining control of the resale market to drive profitability

Long considered a peripheral or even competing market, second-hand fashion is now establishing itself as a new engine for growth and product cycle monetisation in affordable luxury. By deploying its own white-label resale solution, the SMCP Group is doing more than just following a trend: it is reclaiming a market segment that brands had gradually lost to third-party platforms.

The stakes go far beyond simple diversification. Second-hand fashion is no longer an extra channel; it is redefining where and how value is created in fashion retail. In a context of shrinking volumes, rising acquisition costs, and changing purchasing behaviours, the ability to capture value throughout the entire product lifecycle is becoming a decisive competitive advantage.

From the periphery to the core of the model: a structural shift

In this context, growth forecasts for the pre-loved segment, estimated at around 10 percent per year by 2030, significantly surpass those of the primary market. This dynamic is no longer a cyclical effect but a structural transformation in consumer choices.

For Isabelle Guichot, chief executive officer of SMCP, the observation is now unequivocal: resale has established itself as part of the customer journey. “It has become clear that resale is an integral part of consumer behaviour. Seeing the volume of our own items on platforms like Vinted was a wake-up call,” she explains. During a discussion with AlixPartners and Faume, the diagnosis became clear: second-hand fashion is no longer on the periphery of accessible luxury, but its new centre of gravity.

This shift is forcing brands to fundamentally reassess their understanding of the business model. For years, the industry has thought in terms of sell-in and sell-out, focusing exclusively on the first transaction. However, the growing circulation of products on the secondary market reveals a different reality: a significant portion of value is now eluding brands.

What was once considered an externality, peer-to-peer resale now appears as a direct loss of revenue. The challenge is no longer whether to be present in this market, but how to structure it to capture its flows. Value is no longer limited to the initial purchase; it is built on the ability to orchestrate the entire product lifecycle: resale, credit, repurchase, within a controlled ecosystem.

Regaining sovereignty: data, image, margin

The rise of consumer-to-consumer (C2C) platforms like Vinted or Vestiaire Collective has profoundly reshaped the market. While these players have played a key role in educating the public, they have also captured a significant share of the value. This has gradually deprived brands of three critical assets: customer data, image control, and margin on the extended product lifecycle.

The main challenge of SMCP's strategy therefore lies in breaking this dependency. By leveraging Faume's technological infrastructure, the group is internalising the entire second-hand value chain. This choice is not merely operational; it is highly strategic. It allows for the re-establishment of service continuity between new and pre-loved items, whereas third-party platforms systematically introduce a break in the experience and a dilution of the brand narrative.

This continuity is all the more essential in the accessible luxury sector, where desirability rests as much on the object as on its transactional environment. SMCP refuses to offer a degraded experience for its pre-loved products. Aymeric Déchin, CEO of Faume, insists on this point: “A second-hand product should never be synonymous with a degraded experience. Desirability lies not only in the object, but in the tone, imagery, and every interaction.” At Maje or Sandro, the second-hand tab is designed to mirror the main boutique. By standardising protocols for systematic authentication, professional refurbishment, and presentation (visuals, descriptions, storytelling), the group avoids the pitfall of anonymity found on classic marketplaces. The second-hand product remains a branded item, shipped in the house's original packaging. This rigour transforms a pre-loved transaction into a complete brand experience, justifying a coherent price positioning aligned with the prestige of the group's labels.

A lever for acquisition and loyalty at a controlled cost

The impact of second-hand fashion on SMCP's customer base is immediate and measurable. One of the model's most significant findings is its ability to generate new streams at a particularly competitive marginal cost. Isabelle Guichot highlights a decisive point: nearly 50 percent of users of vouchers from resale were not registered in the group's CRM databases.

In an environment where the customer acquisition cost (CAC) via traditional digital channels is constantly increasing, sometimes exceeding 100 euros depending on the segment, second-hand fashion acts as an almost self-funded acquisition lever. Olivier Abtan, partner at AlixPartners, analyses this dynamic: “Resale is now absorbing demand because it perfectly matches the new logic of consumption: value, liquidity, and durability. It is no longer a marginal phenomenon.”

Contrary to popular belief, this model does not cannibalise new sales; it functions as an ‘organic’ conversion funnel. Resale becomes a strategic entry point into the brand's ecosystem, particularly effective with younger customers, especially Gen Z and Millennials. The data also indicates a conversion rate to purchasing new products of around 30 percent within eighteen months of a first interaction via the second-hand channel. This recruitment naturally transforms into long-term loyalty, anchoring the customer in the complete lifecycle of the collections.

The physical store as a circular services platform

The integration of second-hand fashion into the boutique network, approximately 50 points-of-sale per brand in Europe, is profoundly transforming the role of physical retail. Stores are no longer just places of transaction. They are becoming multidimensional service platforms that integrate drop-off, take-back, and value reactivation. By becoming collection centres, the boutiques solve the major problem of sourcing quality pieces while generating significant operational benefits:

Qualified flow and traffic: Dropping off an item involves an intentional physical visit. This visit to a terminal or checkout creates an immediate opportunity for interaction and sales.
Immediate liquidity: The in-store buy-back system offers much greater fluidity than C2C platforms. Unlike an uncertain and lengthy peer-to-peer sale, the instant payment of a store credit encourages immediate reuse of capital within the brand.
Upsell mechanism: With an average voucher value of around 60 euros, the customer is naturally encouraged to supplement their budget to purchase a piece from the current collection. As Isabelle Guichot points out: “You don't buy a new product at this price; the customer therefore uses their voucher as a contribution towards their next purchase.” Second-hand fashion thus becomes a direct tool to support sales of new items.
Team engagement: For sales teams, this service becomes a powerful clienteling tool. It allows them to identify and activate profiles that were previously invisible or off the radar of traditional retail, thereby strengthening the customer relationship in the long term.

Residual value: a new pillar of pricing

One of the most structuring contributions of this strategy lies in the profound redefinition of pricing. Like the automotive industry, resale value is becoming a decision-making criterion from the initial purchase. The consumer no longer evaluates only the face value of a Sandro or Maje piece, but a net cost of ownership that incorporates the product's residual value.

By internalising its secondary market, SMCP is able to stabilise this value and protect its margins on new items. This control limits the excessive depreciation seen on generalist platforms, where the lack of certification and oversight systematically drives prices down. Olivier Abtan, partner at AlixPartners, compares this evolution to the certified pre-owned market: “If you manage a certified resale, you stabilise residuals, protect the price reference, and thus support your margins on the primary market.”

This ‘Certified Pre-Owned’ logic helps protect the brand's equity by avoiding overly drastic price differences between new and pre-loved items. In an economy where the customer increasingly calculates their resale potential before confirming their basket, the guarantee of a high second-hand value becomes a major selling point for the new product. Second-hand fashion no longer degrades the brand's perceived value; it structures, secures, and strengthens it in the long term.

A strategic repositioning in relation to other industry players

SMCP's approach is part of a still heterogeneous landscape. Some groups, like Kering, have chosen to invest in external platforms, while others, like LVMH, are adopting a more cautious stance, prioritising control over primary distribution.

The choice of internalisation made by SMCP therefore constitutes a distinct path. It reflects a strong conviction: the strategic value of second-hand fashion lies not only in volume, but in mastering the experience and data. Ultimately, these assets will determine the ability of brands to manage their customer relationships in a fragmented environment.

Towards a circular data economy: the new behavioural sensor

For SMCP, the short-term objective is to unify all interactions (purchase, resale, rental, repair) within a single data ecosystem. This vision implies a profound transformation of CRM systems, which must now be capable of mapping non-linear, multi-touchpoint customer journeys.

Isabelle Guichot insists on this holistic approach, which has become vital for the brand's relevance: “The purchasing journey is no longer linear. We must be present at all touchpoints, whether it's social media, e-commerce, shop windows, or the resale market.”

This strategy transforms second-hand fashion into an unprecedented behavioural data sensor. It allows for a much finer reading of consumption dynamics: the frequency of wardrobe renewal; real price sensitivity; or the appetite for certain product categories. By extending the conversation with the customer well beyond the initial sale, SMCP is no longer just selling a product; the group is managing a service ecosystem that maximises the value of each customer in the long term. Circular data thus becomes the new lever of agility for anticipating the expectations of an increasingly volatile consumer.

Second-hand as the infrastructure for tomorrow's retail

The example of SMCP highlights a broader transformation in the industry. Second-hand fashion can no longer be considered an opportunistic initiative or a simple image-building tool. It is becoming a structural component of the business model, on par with e-commerce or physical retail.

In a context of pressure on margins, demand volatility, and soaring acquisition costs, the ability to generate value from products already in circulation constitutes a major competitive advantage. What SMCP demonstrates is not just the profitability of second-hand fashion, but its capacity to redefine the fundamentals of retail.

Tomorrow, the question will no longer be who sells a product, but who controls its value, from the first purchase to its resale.

This article was translated to English using an AI tool.

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