Monday, May 27, 2024

Second-hand fashion site Vinted posts first annual profit

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Vinted has posted an annual profit for the first time as Europe’s largest online marketplace for used clothes also enjoyed rapid revenue growth amid the rising interest in buying and selling of second hand fashion.

The Lithuanian start-up, much loved by fashionistas across the continent, made a net profit of €18 million last year versus a loss of €20 million in 2022. Sales increased by 61 per cent to €596 million.

“Second-hand fashion is still a relatively immature market and only a tiny proportion of fashion overall. Our performance in 2023 was not only proof that we can deliver strong growth but that we are at the forefront of a market with huge potential,” said Thomas Plantenga, Vinted’s chief executive.

Founded in 2008, Vinted was last valued at €3.5 billion in May 2021. It has been looking at options for its capital structure including a secondary share sale ahead of a potential stock market listing.

It is positioning itself as Europe’s leading player in the sustainable fashion market, aiming both to get more customers in more countries to buy and sell used clothes and to improve logistics for delivering goods between consumers.

“With what we’re trying to do [and] make second hand the first choice, there’s much more to do than just building a marketplace,” Mr Plantenga told the Financial Times.

Investors and bankers say start-ups looking to float need to be profitable, unlike in the previous decade when low interest rates led to shareholders being more seduced by growth prospects.

Plantenga stressed that Vinted had historically invested heavily, and still saw “many opportunities on the horizon”. It secured a €50 million revolving credit facility at the end of last year from BNP Paribas and ING Bank for future investment or expansion plans, including takeovers.

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“We don’t give any timelines on IPO. The reality is that we just want to be able to take any type of financing, whether it’s debt, whether it’s public, whether it’s taking it public,” he added.

The Vilnius-based group is present in countries from the US and UK to France, Germany and Italy. It started in Denmark, Finland and Romania last year.

It is moving away from purely being a marketplace to offering other services such as Vinted Go, a shipping service that has its own lockers for customers to deliver and collect clothes in France. Vinted added that it would invest heavily in Go in France, the Netherlands and Belgium in particular this year.

Last year it secured an electronic money institution licence from the Lithuanian central bank to allow it to offer customers payment services as well as acquiring a verification service for luxury clothes in 2022 in an aim to make buying and selling high-value items safer.

Mr lantenga said it was “early days” for payments but that Vinted would consider offering its own solution eventually.

He stressed that the company made no “promises on future profits” as it depended on the pace of investments. He added: “We see many opportunities ahead, so we’ll continue to balance profitability against investment opportunities to accelerate towards our mission.” – Copyright The Financial Times Limited 2024

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