Stella McCartney makes peace with consignment

The partnership marks the first strategic move by a luxury brand to team up with a company like The RealReal. Until now, the relationship between the luxury industry and the online consignment companies has been tense. CEO Julie Wainwright has said that brands see The RealReal as cannibalizing their business, or don’t believe that their goods should be traded around online. She added that brands’ attitudes toward the company has progressed, however: While initially, they wanted nothing to do with The RealReal and competitors, which capitalize on reselling their products for profit, they’re now beginning to recognize that the online consignment industry might be too big to ignore. According to a January report by Fung Global, online consignment is worth $34 billion, and is growing 10 percent year over year.

Stella McCartney is the first to capitalize on it, coming around to the idea that consignment is a way of burnishing their environmental credentials. There’s also a business boost: Stella McCartney will receive a portion from sales in The RealReal store shop-in-shop, plus facilitating consignment in Stella McCartney stores can drive foot traffic. For its part, this is the first time The RealReal can point to a luxury brand as a sustainability partner as a marketing pitch.

According to Wainwright, The RealReal had been trying to win over Stella McCartney for years, but it took time for The RealReal to mature. While it’s not yet profitable, the business has raised $173 million in venture capital to date, employs 800 people, and claims to have sold $500 million in merchandise last year. Now that McCartney is on board, it opens up the potential for more brands to see online consignment companies as sustainability partners rather than competitors.

“Stella McCartney has become a leader in luxury sustainability, and her signing on to The RealReal as a strategic partner raises a bigger conversation,” said Kathleen Wright, the founder of sustainable manufacturing platform Piece & Co. “Consumers will see luxury consignment as a way to shop more consciously, and knowing the designer is on board gives it validation.”

Wright added that the life cycle of apparel is an important pillar in a sustainable fashion industry, and that positioning The RealReal as a way to shop while minimizing a carbon footprint could bring more brands on board in the future.

Already, the push for sustainability is binding together brands who otherwise hold their production process and operations close to the chest. The membership organization Fashion Positive is getting its brand members to share resources and information for more sustainable production with one another. Right now, brands like Stella McCartney, H&M and Eileen Fisher are participants. The problem Fashion Positive is aiming to solve is that overhauling company operations to be more sustainable can be prohibitively expensive.

“These brands usually work in a really competitive way, where, even if they’re sharing materials or suppliers they don’t really talk to each other about it,” said Fashion Positive director Annie Gullingsrud. “Now, I’m witnessing vastly different companies like H&M and Kering require partnership and collaboration to achieve their sustainability goals.”

Similarly, as The RealReal can be seen as competition to luxury brands, McCartney said in a statement that working with the company is necessary to preventing more waste in the fashion industry.

“Thinking about the life cycle of your products is common sense for brands at this point, and ignoring the ways consignment can prevent clothes going to the landfill is a mistake,” said Wright. “If you’re not panicked about the harm the industry is causing, you’re living under a rock.”