The fastest-growing corner of fashion isn't luxury, it's second-hand. And it's quietly eating the whole industry.
Our take
The fashion landscape is undergoing a seismic shift, and the numbers don't lie. The article’s headline – that secondhand clothing is growing two to three times faster than new apparel – should serve as a stark wake-up call for luxury brands. While established houses like Gucci and Louis Vuitton grapple with a softening market, a vibrant resale ecosystem is quietly gaining momentum. It’s a trend that highlights a fundamental shift in consumer behavior, particularly among Gen Z and millennials, who are increasingly prioritizing sustainability, value, and unique finds. This isn't simply about thrifting; it’s a reimagining of ownership and consumption, and it’s impacting the entire industry. Consider the recent trend of stylish travelers opting for elevated footwear over trainers, as seen in No Suitcase, No Trainers—This is the Bag and Shoe Trend Stylish Dressers Are Wearing to the Airport Instead, demonstrating a move towards considered purchases over fleeting trends. The rise of resale also underscores a broader cultural conversation about conscious consumption – a conversation that luxury brands can no longer afford to ignore. The article’s breakdown of the fashion industry into five distinct universes – luxury, fast fashion/value, sportswear/footwear, US mall & denim, and resale/recommerce – is particularly insightful. It emphasizes that “fashion” isn’t a monolithic entity, but a collection of diverse markets with their own unique drivers and challenges. The success of brands like Abercrombie & Fitch and American Eagle highlights the resurgence of certain segments often overlooked, while the struggles of Kering and Gucci underscore the vulnerability of even the most iconic luxury brands in the face of changing consumer preferences. The Prada incident, detailed in the article, serves as a powerful reminder of the reputational risks associated with cultural appropriation and the importance of authenticity and respect in brand storytelling. It’s a lesson that resonates deeply with the values of today’s discerning consumer, who is quick to call out brands that fall short. Furthermore, the focus on the UAE/Gulf region as a burgeoning luxury resale market reveals a globalized trend, expanding beyond Western markets and highlighting the need for brands to adapt their strategies to cater to diverse cultural contexts. A well-curated capsule wardrobe, like the one featured in I'm a Jewelry Designer in L.A.—This Is My Citizens of Humanity Capsule Wardrobe, speaks to the desire for enduring style over fleeting trends, a sentiment that aligns perfectly with the ethos of resale. The key takeaway here is that the rise of resale isn’t simply a threat to traditional luxury brands; it’s an opportunity for reinvention. Rather than viewing resale as a competitor, luxury houses should explore ways to integrate it into their business models – perhaps through partnerships with resale platforms, offering authentication services, or even launching their own pre-owned programs. The fact that certain Hermès handbags retain or even increase in value on the resale market underscores the enduring desirability of these brands and their potential to thrive in this new ecosystem. The shift towards digital influence in retail, highlighted in the article, further emphasizes the need for brands to cultivate a strong online presence and engage with consumers authentically. It’s no longer enough to simply create beautiful products; brands must also build meaningful relationships with their customers and foster a sense of community. Even the seemingly unrelated trend of summer shoe choices, like those showcased in Kate Moss Paired Her Denim Mini Skirt With a Summer Shoe Trend I Thought I’d Never See on Over 50s, speaks to a broader desire for individual expression and a rejection of rigid fashion rules, further fueling the resale market’s appeal. Ultimately, the future of fashion lies in embracing circularity and sustainability. The brands that thrive will be those that can adapt to the evolving needs and values of consumers, recognizing that luxury is no longer solely defined by price or exclusivity, but by quality, craftsmanship, and ethical practices. The article’s caution against viewing resale platforms as guaranteed investment successes is also well-placed – a hot trend doesn’t automatically equate to a strong business model.
Here's a stat that should worry every luxury CEO: secondhand clothing is now growing 2 to 3 times faster than the brand-new stuff they're selling. While Gucci and Louis Vuitton fight over shoppers who've gone quiet, a booming resale market is quietly eating the whole industry's lunch, and most investors aren't watching the right names.
Because here's the thing everyone gets wrong: "fashion" isn't one trade. In 2026 it's split into at least five separate universes behaving nothing alike. Here's a map of the whole board, with the numbers that matter.
The scale first: global apparel is roughly a $1.8 trillion market, but growing at only low single digits (~3-4% a year). So this isn't a rising-tide story, it's a fight over who takes share. And that's exactly what's happening.
1. Luxury (mostly European, diverging hard)
- LVMH (Louis Vuitton, Dior; Paris, US OTC LVMUY), soft first half, fashion division only just crept back to +1% in Q2 after seven flat/declining quarters.
- Hermès (Paris), the consistent outperformer.
- Kering (Gucci; Paris), the big laggard; ~50% of group profit rides on Gucci alone.
- Also: Prada (Milan/Hong Kong-listed), Burberry (London), and US-listed Tapestry (TPR) (Coach) and Capri (CPRI) (Michael Kors, Versace). BCG reckons luxury only grows ~2-5% a year near-term, the "rebound and reset" era is over.
2. Fast fashion / value (taking share)
- Inditex (Zara; Madrid), ~8-9% growth, huge net cash.
- H&M (Stockholm).
- Off-price winners TJX (TJX) (TK Maxx) and Ross (ROST), which do well when shoppers trade down.
3. Sportswear / footwear (resets + a tariff story)
- Nike (NKE), net income down ~35% (tariffs + tax); mid-reset.
- Adidas (Frankfurt, US OTC ADDYY), bounce-back, ~14% currency-neutral growth.
- Lululemon (LULU), flagged a ~$380m gross tariff hit for 2026.
- Birkenstock (BIRK), ~14% constant-currency growth.
4. US mall & denim (the 2026 surprise)
- Abercrombie & Fitch (ANF), a genuine retail comeback.
- American Eagle (AEO), Urban Outfitters (URBN) (Anthropologie/Free People are the real engine).
- Levi's (LEVI), denim revival; Ralph Lauren (RL), quietly strong.
5. Resale / recommerce (the fastest-growing corner)
The trend most people underrate, and the one from the top of this post. Secondhand fashion is a ~$200bn+ global market growing 2-3x faster than new apparel (BCG/ThredUp), with US resale alone tracking toward ~$24bn in 2026. Roughly two-thirds of Gen Z and millennials have bought secondhand, and ~60% of shoppers now say resale value affects what they buy new. It cuts two ways for investors: a headwind for full-price sellers, a tailwind for the platforms, The RealReal (REAL), ThredUp (TDUP), plus eBay (EBAY) and Etsy (ETSY).
(Notable: some luxury handbags, Hermès especially, can hold or gain value resold, part of why the brand's so resilient.)
The controversy worth knowing: Prada and the Kolhapuri chappal
Good example of how brand reputation is a real business factor, not just noise. In June 2025 Prada showed leather sandals at Milan that closely resembled India's traditional Kolhapuri chappals (a 12th-century handcrafted design, GI-protected since 2019), without initially crediting their origin, and reportedly priced them around ₹1.2 lakh (~$1,400+) vs a few hundred rupees for the originals. Cue a big cultural-appropriation backlash and a PIL in the Bombay High Court. Prada then acknowledged the Indian roots, visited Kolhapur, and signed a deal with state-backed artisan bodies to co-produce a limited "Kolhapuri-inspired" line (~2,000 pairs, launching early 2026). Adidas had a near-identical episode over an Indigenous Mexican design, so it's an industry-wide theme. For luxury, brand desirability is the asset, so reputational/IP missteps carry genuine commercial risk (and, handled well, can become an opportunity).
Other trends worth knowing: tariffs are the dominant 2026 margin story for US brands; "dupes"/value positioning keeps winning (same behaviour as the e.l.f. effect in beauty); ~70% of retail sales are now digitally influenced; and the UAE/Gulf is flagged as a leading luxury-resale demand region.
The honest reality check: "fashion" is at least five different bets with different economics. A tariff line, a single-brand dependence, or a trade-down tailwind matters far more than how cool the label is. A famous brand isn't a strong stock, Gucci is iconic and its parent's been the worst performer, while an unglamorous off-price chain quietly compounds. And that headline stat cuts both ways: resale growing fast doesn't automatically make the resale platforms good investments (several are small and unprofitable). A hot trend isn't a signal.
One Gulf note: several luxury houses reported Middle East store sales dropping sharply during the recent regional disruption, a reminder that even the strongest brands face macro and geopolitical shocks they don't control.
Which fashion brands do you buy from and would you invest in them?
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