Second-hand fashion is becoming an increasingly important factor in the clothing sector, but is creating winners rather than losers among Europe's biggest clothing retailers, according to RBC Capital Markets, as younger shoppers increasingly buy clothes with an eye on what they might be worth later.
The global second-hand apparel market has doubled in size over the past five years to account for around 10% of clothing sales.
RBC expects the sector to grow by a further 40% by 2030, when second-hand items could account for 12-13% of all clothes sold.
"More shoppers are choosing to buy second hand, in order to save money, drive circularity in the sector and to avoid waste," wrote analyst Richard Chamberlain.
The shift is being driven by younger consumers in particular, using apps like Vinted, Depop, Poshmark, Vestiaire Collective and eBay.
"Purchasing decisions are often made with resale value in mind," the analyst said, creating what he described as an apparel "flywheel" in which consumers increasingly view clothing as an asset with future value.
Rather than being disrupted, many large retailers are adapting to the trend. RBC said "the major fashion retailers are responding well", highlighting Inditex's Zara, H&M, Zalando and ASOS PLC (LSE:ASC).
Zara has become the second most-shopped brand globally for resale, behind privately owned US brand J.Crew.
The trend could also benefit companies such as Next PLC (LSE:NXT), one of RBC's preferred names in European retailing.
Chamberlain noted that the global fashion market remains highly fragmented, with Inditex holding only around 2.5% market share and H&M about 1.2%, leaving ample room for established brands to grow even as second-hand clothing becomes a larger part of the market.
