Yahoo Finance Vestiaire Collective CEO Max Bittner Talks About Hitting Profitability Before an IPO
Note: This story has been updated at 2 p.m. EST.
Max Bittner, the global chief executive officer of the Paris-based Vestiaire Collective luxury resale website, sees taking the company public in the not-too-distant future.
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But first things first.
“I will not do an IPO before the company turns profitable,” Bittner told WWD, revealing publicly a particular precondition for listing shares.
“Obviously, an IPO is much less about what I want. Right? I can sit here and say what I want all day long. An IPO is possible or not possible depending on the macro environment. Right now, the macro environment is not very IPO friendly. Do I think the macro environment will change in the next 12 months? No.”
Bittner isn’t the only one feeling the macro squeeze. Sneaker brand Golden Goose teed up what was to be a much-watched IPO only to pull back at the 11th hour, citing “European market volatility.”
What should change over the next year is Vestiaire Collective’s bottom line.
“I think we will approach profitability in the next 12 months,” Bittner said. “It takes a long time, depending on how fast you’re trying to get there. It’s important to remind people that e-commerce is very much about attaining economies of scale. It’s very different from offline retail, where you launch one store, it can be profitable, and then you launch the next one. In e-commerce, the platform needs to work from Day One, and the platform is not just the website. It’s everything around the website — discoverability, shipping and fraud if it’s happening on the platform. There’s a bigger up-front investment needed.”
With all that, profitability takes a while.
Further growth of Vestiaire Collective’s business in the U.S. would also go a long way to sway potential investors and support an IPO. “Our U.S. business has accelerated significantly over the last six to 12 months, because of the intrinsic work we’re doing to win in the U.S.,” Bittner said. “We’re getting better at a lot of things, and a lot of it is the day-to-day execution by my team.”
Founded in Paris in 2009, Vestiaire Collective is a certified B Corp, active in 70 countries worldwide, with a stated mission to help make the fashion industry more sustainable by enabling consumers to sell and buy “pre-loved” luxury fashion. Bittner has been running the company since 2019. Previously, he cofounded the Lazada Group, an e-commerce company that became one of the largest in Southeast Asia and was bought by Alibaba in 2016.
In the following Q&A, excerpted from a lengthy conversation, Bittner discusses Vestiaire Collective’s recent financial performance, the billion-dollar valuation, efforts to grow the U.S. business, and why seven months ago, he and his wife and three daughters moved from Paris to Manhattan’s Upper East Side.
WWD: How is the company performing?
Max Bittner: Overall, the business is in a very good spot. We have seen disruption caused by the macroeconomic environment over the last two years; we’re talking about higher inflation and higher interest rates causing a much more uncertain consumer environment. But our business has navigated through that storm and proved to be incredibly resilient, more resilient than our…competitive universe. For the first time in the last two years, I’m looking at the macro environment and our micro environment with a lot more optimism.
WWD: What about consumers shifting their discretionary dollars away from goods to more travel, dining out and other experiences?
M.B.: That’s been the narrative over the last 12 to 18 months, and it’s starting to change. We’ve seen a post-COVID[-19] bounce back of travel and experience. People were starved of those during COVID-19. The pendulum swung too far into that space in 2022 and 2023. Now we are seeing a normalization. But as a result of the macroeconomic environment, consumers have become more price conscious, decisive and selective in what they buy, and much more focused on the balance between price and quality. But there’s definitely an advantage in secondhand products, and in making these luxury goods affordable in today’s environment.
WWD: Can you discuss the company’s performance in the first half?
M.B.: Our first half ended stronger than it started, and is now reaching similar growth levels we saw at the end of the first half of last year. The business has really accelerated. We don’t really disclose the financial performance, but we see revenue growth accelerating to north of 20 percent in the second half of this year.
WWD: What’s driving the bullish outlook?
M.B.: Our focus on the U.S. is paying off very nicely. We’ve been operating in the U.S. for at least seven years. Our U.S. business used to be a very one-sided business, with very sophisticated U.S. consumers buying very unique items from our European supply. There would very much be a one-[sided] flow of goods from Europe, from our European sellers, to our U.S. buyers. But over the last three to five years we’ve rebalanced the business to grow the U.S. supply and not just being based on U.S. demand.
The U.S. is the biggest single luxury market with a huge amount of unlocked supply in the wardrobes of U.S. consumers. We’ve led a very concerted effort over the last two to three years to unlock that supply. It’s been in multiple stages. The first stage was the acquisition of Tradesy, just over two years ago, and through that we acquired a huge amount of local supply [creating] a balance between local supply and international supply to give what we think is a very unique and best priced supply of luxury goods.
WWD: What does the U.S. represent as a percent of the business now, and where do you see it going?
M.B.: It’s roughly a quarter. I think we can get to 35, 40 percent of our business being the U.S. in the next three to five years.
WWD: Have you bolstered your U.S. operations?
M.B.: We have invested in the U.S. organization. Many of the team members have joined within the last 12 months. We’re at 50 members, and I would say 30 before. The team is largely [centered] around marketing, PR and the consumer-facing components building the business. We have a logistics team in Industry City in Brooklyn. That team grows as the business grows.
The facility has been open three or four years. We have about 25 people there. A seller would send the product to the facility where we would authenticate and do a quality check. From there, the product would then be sent to you, the buyer. We don’t store anything per se there. We don’t own any of our inventory, so it’s a cross docking facility where we provide authentication services.
WWD: What are the advantages of having you based here, while Vestiaire is headquartered in Paris?
M.B.: I ensure that Paris, our European headquarters, thinks U.S. business first. That’s really what I bring to the table.…The U.S. market is the hardest consumer market in the world. The U.S. consumer is the most demanding. You need to be at the top of your game to make the U.S. consumer happy. And that is very hard to do remotely, any one of my employees sitting in Paris. It also allows me to interact with U.S. consumers in a different frequency. It’s been an absolute game changer for me to be here. It is tiring because I still have to fly back to Paris every third week. But it’s been very successful.
WWD: Who are the key investors in the Vestiaire Collective?
M.B.: The biggest shareholder is a French private equity fund called Eurazeo. But there’s quite a few others with smaller to medium size positions investors, whether it’s Condé Nast or Kering.
WWD: Do you have a big stake in the business yourself?
M.B.: Now you’re getting really personal. I do. I don’t describe it. I invested quite significantly into the company when I joined. I invested over several rounds.
WWD: Last January you did a crowdfunding campaign bringing in investment, how did that go?
M.B.: The crowdfunding is more of a way to engage with our community. If you think about the amount of money we raised through the fundraiser [3.5 million euros], it’s a drop in the ocean.
WWD: If the company did go public, where would you list?
M.B.: That’s a good question. I do believe that our focus on the U.S., gaining traction would allow us to think of New York being a location to list, but I think it’s a bit too early to make a definitive statement about that.
WWD: The company has been valued at around $1 billion. What’s that based on?
M.B.: Valuations like ours are usually derived in multiple ways. The most common would be some sort of revenue multiple, or a gross profit multiple, or a multiple of EBITDA and where the investors think the company will be over the next two, three years. In our case, it would be difficult to value the business with an EBITDA multiple because we’re not profitable yet.
WWD: What’s the volume of the company?
M.B.: We don’t give that out publicly. Let’s put it this way: Our GMV [gross merchandise value] is around the $1 billion mark.
WWD: Are certain items or categories selling better than others?
M.B.: Not really. We continue to remain focused on what we’re good at, which is largely luxury and women’s ready-to-wear, accessories and leather goods. We’re not necessarily talking about jewelry or watches. We think that’s a slightly different business. I wouldn’t say that ready-to-wear is doing better or worse than leather goods. The business is very consistently performing. We’ve always been very strong in ready-to-wear where we see our share in the U.S. growing because our local competitors are more focused on bags. But I don’t think there’s one category which is doing significantly better than others.
WWD: I did see some jewelry on your website.
M.B.: We’re a [consumer-to-consumer] platform, so if you want to sell jewelry, or you want to sell watches, you can. But again, the bulk of our business is bags, ready-to-wear [and] shoes.
WWD: What about menswear?
M.B.: I have personally sold a lot of menswear on the platform — 75 items on the platform. There’s clearly a big market out there for men’s. Like every other business in the world, it’s all about focus. And I think right now our focus is still on women’s because there the opportunity is so huge for us, especially in the U.S. There’s only so many things you can do really well.
WWD: How much of the goods going through your platform end up being counterfeit?
M.B.: It’s a very small share of the business, I say one in 1,000 to 2,000.
WWD: What role does AI play?
M.B.: Historically, we’ve had six languages globally. We were serving a big part of our business in English. So in countries like Sweden, Holland or even in traditionally Chinese-speaking markets, we were only offering English. With AI, we translated all of this and support local customers in a local language. AI, in this case, it would be LLM, which are large language models, translate exponentially better and with the right tone of voice. This goes much further than what you see on the site. You also see customer service in your local language. And that is without us having local language customer service agents. So our agents are now only French or English. And the service in German, Italian, Spanish, Swedish, Dutch and Chinese are real-time translations through AI models. It makes our business more scalable.
WWD: How do you characterize yourself as an executive?
M.B.: If you’re operating an e-commerce business like mine, you need to know everything. I don’t see myself as a financial CEO. I love the details of the business, whether it’s the logistics, the marketing and, of course, the tech side of our business. I’m very fortunate because I still have the two founders of the Vestiaire Collective, Fanny Moizant and Sophie Hersan, in the business.…They have such a good understanding of our consumers — which are largely women [and] luxury consumers — and such an understanding of our brands. The two of them, especially Fanny in her role as president, complement my skill set.
When I came into the business five years ago, I was this e-commerce ruffian from Indonesia. I was selling mobile phones and shampoo and $6 cheap Chinese dresses to Indonesian consumers with an average basket size of $15. I was very humble about my understanding of the luxury industry and the luxury consumer. I remain very humbled by it.
The Vestiaire Collective, at a Glance
The company sold 2.3 million items to 800,000 unique buyers in 2023.
More than 5 million items and 12,000 brands available online.
30,000 new fashion items listed daily.
The platform reaches 70 countries.
Four authentication centers — in France, the U.K., Hong Kong and U.S.
2.5 million items authenticated physically since 2019.
Average basket size in first half of 2024: 350 euros in Europe, $450 in the U.S.
Fees for sellers: In the U.S. or U.K., a 3 percent payment processing fee. Elsewhere, the 3 percent processing fee and a 10 percent selling charge or up to 20% for select international countries.
Fees for buyers: 3 percent for processing.
VIP service includes pick up, photography and storage, with a 10 to 20 percent charge.
Vestiaire, a French word, translates in English to a collective or shared wardrobe.
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