120 billion euros. That is the amount that Europeans put into their wardrobe every year. And everyone knows that a good part of those pants, sweaters and dresses are then only occasionally put on.
That science is the basis of Vinted’s advance. The Lithuania-based company’s app has found a place on the mobile phone of millions of Europeans who want to buy or sell second-hand clothing. On Tuesday, Vinted announced that it would take over the Dutch United Wardrobe. Financial details have not been disclosed.
Earlier this year, the Lithuanian company, where Dutchman Thomas Plantenga holds the highest position, took over the Spanish Chicfy. Vinted is now active in twelve countries and has 34 million users.
And it is precisely that scale that is important. Just like with meal deliverers. Only the largest can be successful, as margins are small and marketing expenditure is high.
A lot of capital is needed in the race to stay ahead. That does not (yet) come from the earnings. They don’t keep pace with costs. The Lithuanian company, founded in 2008, raised 128 million euros a year ago from private equity firms. In 2018, a financing round yielded 50 million euros. In total, the counter now stands at 261 million euros.
Such rounds of investment, in which capital providers receive shares for their money, give the company a new valuation. Since last year’s funding round, Vinted has been one of the unicorns, companies that are worth more than $ 1 billion on paper.
Also read:Second-hand is no longer a sign of poverty
Plantenga, who started at Vinted four years ago, now has experience with growing pains. The 36-year-old Dutchman, who became involved as a consultant through a financier, saved the company from collapse, among other things by sending almost half of the staff away and halving the number of branches to four. Today, approximately 500 people work at Vinted. Plantenga also provided a different business model: the seller can now offer the second-hand clothing free of charge. Buyers pay a fixed commission and a percentage of the sale price.
That the market is growing fast, is evident from the transactions reported by Vinted. In 2019, 1.3 billion euros was sold via the app, compared to 500 million euros a year earlier. In 2018, turnover amounted to nearly 33 million euros and the loss amounted to 42 million euros. According to the company, that was a result of marketing costs and accounting changes. Vinted has not published any turnover figures for 2019.
With the takeover of United Wardrobe, Vinted acquires the Dutch market leader. Founded by three students in 2013, this company states that four million people use the platform.
Also read: United Wardrobe is acquired by Lithuanian industry peer Vinted
‘One network makes more sense’
“It makes more sense to have one network with the most offerings and the most users. Previously you could still become the largest per country, but with the current technology you can now just as easily buy something in Barcelona or Paris ”, Sjuul Berden, general manager of United Wardrobe, says. FD. United Wardrobe, which employs 37 people, will disappear as a name.
Turnover and profit figures for United Wardrobe have not been published recently, not even to the Chamber of Commerce. In the documents that were filed in May of this year, a warning is issued about the consequences of the corona crisis. Despite a decline in turnover in France, where it is active alongside the Netherlands and Belgium, United Wardrobe does not foresee any major problems this spring, given “the strong growth in the Netherlands […] and big cost savings ”.
The economic crisis may prompt people to cash in on their wardrobes. In any case, the pandemic did not prevent internet company Zalando from starting the sale of second-hand clothing this month.
A version of this article also appeared in nrc.next on October 28, 2020
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