How resale platform Luxe Collective is riding TikTok fame to compete

To receive the Vogue Business newsletter, sign up here. Growing up in the affluent British town of Formby, near Liverpool, Luxe Collective founders Ben and Joe Gallagher found it hard to keep up with their friends’ addiction to designer clothes. From a young age, the duo began buying and selling everything from air fresheners and candles to caps and old clothes locally to make extra money. When they discovered online luxury resale sites, they saw an opportunity to bridge their love for fashion with their side hustle. “We thought, there are surely a lot of other kids like us who want luxury stuff quick, cheap and in good condition,” says Ben, speaking from the company’s Liverpool HQ. “That was how we came up with the idea for Luxe Collective.” The Gallaghers launched Luxe Collective in January 2018, when Ben was 17 and Joe was 21, opening a small consignment store in Liverpool where customers could go directly to sell luxury accessories and shoes, which were authenticated and then resold in person or online. Now, it’s an online business, receiving pieces by post and selling them via its website and occasional pop-up. The company also collaborates with Ebay to sell as a concession on its platform, which Ebay helps promote. However, it’s TikTok that has been core to the brand’s success. Ben Gallagher struck gold on the platform when he began posting fashion content — anything from designer biographies to show reviews — under the @luxecollective handle, which has accrued 1.4 million followers since 2019. The business is expected to turn over £7.2.5 million this year, up 60 per cent over 2022, with over 40 per cent of sales in London and a growing business across the UK. Now, the brothers are working to combat cash flow issues, scale supply and boost their fashion industry connections. Online resale has gained traction in recent years, yet major platforms including Thredup and The RealReal have struggled to reach profitability due to fluctuations in demand amid the economic downturn. Luxe Collective is profitable and growing, while remaining UK-based and self-funded for now in order to scale responsibly. Gen Z and millennials are the company’s core customers, and minding price points has helped keep them locked in, even if payouts for products sold to the site might be smaller than competitors. Sell-through rate, Ben says, makes up for it. “Revenue equals vanity, profit equals sanity,” Ben says. “You can scale and sell lots around the world but for us it’s better to really focus on one consumer and build our brand around that one consumer, for us that’s a UK middle-class customer aged 18 to 34.” From TikTok fame to sales growth The brand now has 2 million followers across Instagram, TikTok, YouTube and Linkedin, but it’s TikTok that has been the major driver of the business: Ben was a very early adopter of the platform in 2019, before TikTok took off. His ninth video, a tutorial on how to lace then-trending Alexander McQueen shoes, gained 700,000 views in the first hour. “I didn’t know what an algorithm was back then. But, I did realise that as long as you teach the [TikTok audience] something and they come out of the video gaining some knowledge, that’s what works.” A month after posting the viral video, the UK went into lockdown. No one could come to the Luxe Collective shop or go to the post office to send in stock. And suddenly, the business was operating at “2 per cent capacity”, Ben says, with no new product to sell. He decided to “triple down” on TikTok, producing up to five videos a day educating the audience on fashion history and industry news. By the time lockdown eased in 2021 the account had over 100,000 followers and videos were hitting millions of views. His top video, a brief biography of Karl Lagerfeld released in April this year, has 16 million views and almost 2 million likes. “The reason Luxe Collective’s content resonates is because it’s so inclusive,” says Natasha Ingham, head of luxury brand partnerships at TikTok UK. “It’s flipping the nature of luxury on its head and opening up the luxury industry for the audience. It’s not just about ‘come and buy our products’, it’s about teaching them something.” For Ben, the content also builds authority for the platform, helping audiences to trust their luxury knowledge and in turn their authentication. When lockdown ended and the Gallaghers reopened the small store, it was so busy they couldn’t run the online business the way we wanted to. So, they closed the store, received goods via post and established a weekly drop cadence. From 2021-2022 they sold out almost 100 per cent of every drop of 30-50 high value SKUs, mainly handbags and sneakers, still at competitive prices versus other platforms. While it’s nearly impossible to track the effect of TikTok on sales in a tangible way, Ben says, before Luxe Collective joined TikTok, revenues were around £300,000. From 2021-2022, Luxe Collective sales grew 73 per cent, from £2.6 million to £4.5 million. A few months ago, when Ben stopped producing content for three to four weeks, sales began to plateau on the site. TikTok is also helping the business make luxury connections. After catching the eye of Valentino’s social team, Ben was invited to attend the SS24 menswear show and work with Valentino on content for their social channels. To continue to boost business, Ben now focuses a lot of his time on TikTok, supported by a producer and editor. Joe works more on the back end, namely on operations, logistics and pricing. Luxe Collective prices pieces manually based on their condition and resale value in the wider market, making sure it’s always below competitors. But, while the instant nature of the consignment model means Luxe Collective can pay less to sellers, it can also cause cash flow issues if there’s an influx of supply. “We’re paying out money every single day,” says Ben. “And we can’t really say no to people because we’re spending a lot on trying to capture these customers to sell to us. If we just reject them with their item, it’s a waste.” Authentication is also increasingly challenging across resale platforms, as luxury labels like Louis Vuitton have moved away from “date codes” that can identify when and where the piece was made, to invisible RFID chips that can’t be accessed by third parties. Luxe Collective poached an authenticator from one of the leading luxury resale platforms and for now does all authentication in person. However, as the supply continues to surge, they are also exploring new technology for the future to scale authentication, they recently met with platform MyMarkit, which applies a sensor to items once authenticated, so they can be traced throughout their life cycle for future resales. Expanding the community Looking ahead, Luxe Collective is keen to find new customers across the UK. Shipping abroad and adding duties and customs charges to goods slashes their margins and they don’t want to raise prices for international customers. “We’d rather go deep in the UK than across the world for now,” he says. “There’s still so much potential here.” In terms of supply, as they think about scale, the Gallaghers visited Japan last month to explore potential suppliers of secondhand luxury at scale and the meetings were positive, Ben says. They’re going back in October. After Ebay’s sneaker category lead spotted Luxe Collective’s content on TikTok, Ebay reached out to partner with the company last year. “We love how they use social media to spark a much-needed conversation around pre-loved luxury which engages a new audience to the circular economy,” says Emma-Jayne Hamilton, Ebay category manager for luxury. “Luxe Collective is always very collaborative around key retail moments like Black Friday and they have supported us on their socials for special handbag offers,” says Hamilton. In turn, Ebay helps Luxe Collective promote its initiatives, like a recent three-week London pop-up shop, which ended last week. “There were hundreds of people queuing round the block on the first day,” Ben says. “We couldn’t believe the response.” The plan is to do six pop-up shops a year around the UK going forward, looking at key cities including Manchester or Glasgow in addition to London, to continue to build connections with the brand community. The Ebay partnership aside, Ben and his brother intend to be very selective with collaborations as they grow. “Success is based on how many nos you say, not how many yeses.” he says. “And, in an industry like resale that’s booming and growing every year, the amount of opportunities we’re getting along the way is crazy.” They’ve been offered to open concessions in retailers, to partner on giveaways and were even considering acquisition from a major company last year. But, for now, they want to stay independent. “We have to be really careful with who we partner with,” Ben says. “It feels like at this stage, one bad decision could cost us a year of growth.” From Linkedin to TikTok, Ben and Joe are very transparent with their community about their story and the ongoing struggles of building a business. They do a yearly interview on YouTube about their journey where they reflect on progress. This has become a common strategy for young fashion businesses in the UK, from Represent to Cole Buxton, as it helps build audience loyalty. Another key strategy is disruptive marketing, which is in the works for this year, too. “We want to eventually somehow work with the brands that we’re selling,” Ben says. “Obviously there’s lots of politics in it, and there’s a lot of reasons why they wouldn’t, which we completely understand.” However, given the backlash on luxury labels burning goods and more recent legislation in France and across the EU around fashion waste disposal, he feels brands are going to have to engage more readily with resale going forward. “We want to get on their radar by doing something disruptive, which could potentially involve us being sued,” he says. “However, Corteiz got sued by Nike and three years later they released a shoe together. That is the blueprint. We’re trying to do that as well.” Key takeaway: Luxe Collective has scaled its resale business with a savvy social media strategy to build brand awareness and authority. To reach opportunities across the UK, it needs to continue boosting demand online to counter cash flow issues with the consignment model. Comments, questions or feedback? Email us at feedback@voguebusiness.com. Update: This story was updated to remove embra More from this author: British designer Ashley Williams is staging a comeback Copenhagen pulls off biggest fashion week yet despite brands’ financial worries Ganni’s Copenhagen show put AI on display — but not in its collection

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