Two in 10 second-hand retailers are at high risk of default
The new vintage: use and consumption manual
The second-hand market lived its golden age during the crisis years, at the same time that the Spanish economy was faltering. So much so, that between 2008 and 2011 secondhand managed to increase its average turnover by 60%. The key to your success? Allowing the consumer to buy used parts at prices well below traditional stores and get rid of what they did not want or need in exchange for a pinch.
The rise of these stores was caused by the lack of purchasing power of households, which found an alternative to the traditional market where prices were higher, based on the results of the analysis The second hand does not work in Spain prepared by Iberinform, Credit and Surety subsidiary. In addition, this type of premises became temples of vintage, a style that especially attracted millennial consumers.
Yet even that appeal hasn't saved them from decline once economic bonanza has returned to households. Average billing has been declining until it returned to pre-crisis levels and the situation in many of them has meant that two out of 10 retail businesses are at high risk of non-payment.
Threats are becoming more serious
The economic recovery has alienated some buyers from this type of business and to this is added the price war to which the textile sector was subjected during the years of crisis. The Primark effect, which opened its first store in Spain two years ago, gave the last straw with its low prices; now consumers can buy low cost clothing even in supermarkets. Lidl, for example, sells fashion in its stores. This has meant that customers no longer have to resort to second-hand stores, as they can find new products at low prices.
Also, the liberalization of sales in 2012 has allowed chains to decide when they make their discounts, while before these periods were limited to the traditional winter and summer sales. Now, thanks to these so-called "off-season sales" there are products on sale practically all year round. The Black Friday phenomenon, the massive day of discounts that is celebrated in the month of November and that arrived in Spain five years ago to stay, has also brought forward the Christmas campaign. Now you can buy earlier and cheaper, you no longer have to wait for the February sales.
As a final blow, second-hand online stores such as Vibbo, Poshmark or ThredUp have appeared. The latter sells a total of 359 clothing brands. This business model monopolizes the advantages of online companies, such as a business open 24 hours a day, without geographical limitations, with a greater capacity to study its customers and with a progressive replacement of intermediaries in this market.
Thus, barely 2% of these businesses have reached the size of a medium-sized company and the percentage of large companies is irrelevant. If we analyze the phenomenon by region, 23% of the sector is concentrated in Catalonia, followed by Madrid (19%), Andalusia (15%) and the Valencian Community (12%). Nearly 80% of the sector is made up of micro-enterprises and an additional 18% of small companies.
The environment is also suffering from this crisis
Only buying and selling second-hand fashion at Vibbo saved more than 22,500 tons of CO2. This is an example of what buying and selling used clothing means for the environment, which is affected by the loss of interest of many Spaniards towards these products.
"This huge figure is equivalent to eliminating all the emissions produced by 930,000 Spaniards in a single month, eliminating all traffic in Madrid for 3.9 months or producing 2.8 million sofas," they say from Vibbo.
This scenario contrasts radically with countries like the United States, where second-hand fashion transactions move around 16.2 billion euros a year. This market, which has a large consumption among young people, will reach 33,000 million in turnover in 2022, according to a report issued by the ThredUp platform. However, the trend is moving towards a consumer who is looking for high-quality products: 66% of buyers turn to these stores to buy brand-name products, and they increasingly enjoy more traditional luxury consumers -13% of the market It is moved by millionaire people, according to the document.
And the fact is that luxury does not have an expiration date. During the economic recession, this sector lived with much more relief than other economic groups. So much so that this type of brand increased its value by 72% in the last 12 years, according to the BrandZ index, prepared by Kantar Millward Brown and WPP. In this line, consumers continue to see a great opportunity to get quality and prestige items for a price that is, at least, more affordable.
At the same time, there are articles that are practically impossible to find by other means. This is the case with clothing from previous decades, such as jackets from the sixties or hats from the fifties.