Why the smart fashionistas have stopped buying new clothes
The resale market for designer clothing has never been stronger as women embrace personal style over trends
5 min
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Are you in the market for a classic Chanel 2.55 bag? Or perhaps you’re dreaming about that Zimmermann dress you should have snapped up in store a couple of months ago? Chances are you’re spending as much time scouring the resale market as you are a brand-new version as the lines between new and shop fresh stock blur. The rise in designer and luxury resale globally shows no sign of slowing down. Rather, it is one of the biggest growth areas in the fashion industry today.
According to US-based secondhand fashion platform ThredUp’s 2024 Resale Report, the global secondhand apparel market is set to reach US$350 billion by 2028 — which sees it growing three times faster than the overall apparel market. Further to this, it anticipates that next year, 10 percent of the global apparel market will be made up of secondhand goods.
“There are three key triggers,” says Lauren Kennedy of Australian designer and luxury resale platform, High End. “One of them is sustainability. People are more conscious now of how they’re consuming.”
Of the other factors, cost of living is one —especially with the increasing prices of luxury goods in particular — and the other is the push from younger generations, particularly Gen Z and also Millennials, who feel no stigma around buying secondhand and prefer an individual approach to style.
“Everyone now wants their unique style, and resale offers unique pieces,” says Kennedy. “I would love to go into someone’s wardrobe from 50 years ago and look at all their stuff, because it was made with quality. They really like discovering and finding those unique pieces that you can only get resale, not retail.”
High End was founded as a peer-to-peer Facebook group 10 years ago by Brooke Marks, and six months ago it transitioned to an app and website. Of the Australian brands most in demand, she says it’s Camilla and Marc, Scanlan Theodore, Alemais and Zimmermann.
“And in terms of international designers, the most popular brands on our platform, which do hold their value, are Louis Vuitton, Gucci, Celine, Chanel, Prada,” she says.
Miranda Gillespie founded the luxury resale platform Luxe-It-Fwd in Brisbane in 2016, focusing purely on handbags and accessories. For her site, Louis Vuitton handbags are “the absolute standout” for customers.
“There’s a Louis Vuitton bag that can appeal to everyone,” says Gillespie. “Also, from a pricing point of view, you can have entry-level Louis Vuittons, which might be $1,500, which is quite cheap for a (luxury) handbag. Whereas you can’t enter Chanel at that price point.
“Certainly there is a sustainability element to it, and wanting to make more sustainable fashion shopping choices,” she adds. “But underlying it all, I think it really does come back to economics and being financially more savvy. If someone, for example, can purchase a handbag which might have little to no signs of use and pay $1,000 or $2,000 less than in the store, then that becomes a very attractive economic proposition for them.”
Individual brands have been slower to embrace the resale economy, but as the segment continues to gain traction, some have finally started to enter the fray. While premium and luxury brands are often concerned about devaluing and cannibalising their new products, some have started to dip their toes in the resale waters. It can be a way to show their support for the circular economy, build customer loyalty, and also reap a small, additional, portion of their products’ value.
French It-girl favourite label Isabel Marant has taken matters into its own hands, offering resale items alongside current season in some stores, while also operating a dedicated resale website. Gucci and Alexander McQueen recently partnered with Vestiaire Collective (their parent company, Kering, has a 5 percent stake in the resale platform), while their stablemate, Balenciaga has partnered with Reflaunt.
In Australia, Airrobe is one platform that has fostered direct relationships with brands including Oroton, Ginger & Smart and P.E Nation. Very few brands have launched their own resale platform, but Kit Willow is one that has taken the lead. Willow founded the sustainably focused brand KitX in 2015, and although she is winding up its new collections, the brand’s resale platform, KitXchange, will continue to operate.
“When the concept of KitX started to be born, I always had that vision (to include resale) because people could then circulate what already exists,” says Willow. “The premise is the value of material and design, to reinvigorate it and recirculate it. And that was actually before (we knew) the statistics on how much we were throwing away, which has now been pushed to the forefront, but is also a massive problem on a daily basis.”
Those statistics are truly alarming. In Australia alone, 200,000 tonnes of clothing go into landfill each year. These are among the statistics that Seamless — the name for the National Clothing Stewardship Scheme, a consortium of stakeholders led by the Australian Fashion Council and endorsed by the federal government which commenced in July — is aiming to address, with an aim of circularity in fashion by 2030.
Resale will play its part in this vision for a circular economy. (It is worth noting that Seamless will also ask for a levy of 4 cents for each new item of clothing sold in Australia, which will go towards funding for circularity initiatives; Seamless is currently an opt-in for brands. France, on the other hand, has put in place legislation to try and stem the influx of fast fashion, imposing a €5 surcharge on each item from next year.)
While the resale segment is on a growth trajectory, many are keen to see what its future looks like for business and customers alike.
“It is a new industry and there’s a lot of innovation and a lot of movement,” says Kennedy. “So it will be interesting to see what type of businesses come out on top and profitable, because one of the biggest challenges as a business in the industry is profitability at scale. It costs a lot to run these type of marketplace businesses and marketplaces only really work at scale.”
She believes that even platforms like High End will start to be populated by high-volume sellers who operate as businesses themselves.
Willow believes that one of the reasons the segment will continue to grow is that with the acceleration of climate change and its impact on the environment, natural fibres such as wool, cotton and silk will themselves become more expensive, pushing up prices of virgin garments and thus pushing more consumers into the resale market.
“It makes it even more important for designers to design more timeless pieces and create better quality,” she says, “so that their pieces can be reworn and resold for years to come.”
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Technology and semiconductor shares fell sharply as investors questioned the debt financing the AI infrastructure boom and confronted higher rates and Chinese competition.
Technology and semiconductor shares fell sharply as investors questioned the debt financing the AI infrastructure boom and confronted higher rates and Chinese competition.
4 minA sharp technology sell-off has exposed a new anxiety on global markets: whether the enormous borrowing behind the artificial-intelligence infrastructure boom can generate sufficient returns as interest rates rise and Chinese competition intensifies.
The artificial-intelligence investment boom has powered technology shares, semiconductor manufacturers and data-centre operators to extraordinary heights. Last week, investors were given a reminder that much of this expansion is being built with borrowed money.
The technology-heavy Nasdaq Composite fell 4.5 per cent over the week ended October 16, its weakest performance since late June. Semiconductor shares suffered an even deeper correction, with the Philadelphia Semiconductor Index losing about 11.4 per cent.
The selling spread quickly through global markets. Micron Technology fell 14.6 per cent over the week, while South Korea’s Samsung Electronics and SK Hynix dropped approximately 18 per cent and 24 per cent respectively.
This was more than a routine bout of profit-taking. Investors were reassessing three interconnected risks: higher interest rates, the rapidly expanding debt burden attached to AI infrastructure and the prospect of stronger competition from Chinese memory-chip manufacturers.
The debt behind the AI build-out
Artificial intelligence requires a physical infrastructure network of enormous scale. Data centres must be built, advanced processors purchased, power supplies secured and cooling systems installed before customers begin generating meaningful revenue from them.
Technology companies are increasingly supplementing their own cash with corporate bonds, syndicated loans, equipment leases, private credit and project-level financing.
JPMorgan describes the emerging funding model as a combination of conventional corporate borrowing and project finance tied to individual data-centre assets. In Australia, the Reserve Bank estimates that syndicated loans accounted for approximately three-quarters of data-centre financing during 2025 and 2026 to date.
The numbers are becoming large enough to affect broader credit markets. The Federal Reserve Bank of Dallas has cited Wall Street estimates suggesting AI-related investment-grade bond issuance could approach US$300 billion in 2026 alone.
That borrowing is not automatically problematic. Debt can be an efficient way to finance long-lived infrastructure when future revenue is sufficiently predictable. The concern is that AI technology, customer demand and computing economics are changing much faster than the repayment schedules attached to the assets.
A data centre financed today may carry debt for years. Investors must therefore make assumptions about future utilisation rates, electricity prices, chip performance, customer concentration and the amount businesses will ultimately pay for AI computing.
When interest rates rise, those assumptions become less forgiving.
Inflation changes the calculation
September’s US inflation data intensified the pressure. Consumer prices increased 3.7 per cent over the year, ahead of market expectations and up from 3.4 per cent in August.
The hotter reading reduced confidence that interest rates would fall quickly and pushed bond yields higher. That matters particularly for companies whose valuations depend on profits expected well into the future, as well as highly leveraged infrastructure operators that may need to refinance.
CoreWeave has emerged as a closely watched test case. The specialist cloud-computing company has accumulated substantial debt and lease obligations to build AI capacity, while relying on a concentrated group of large technology customers.
Its shares fell sharply during the sell-off, while the cost of insuring its debt against default climbed. CoreWeave has argued that its contracted backlog more than covers its obligations and that financial markets do not always understand its business model. Nevertheless, its securities have become a proxy for investor confidence in debt-funded AI infrastructure.
Oracle, another major investor in AI computing capacity, fell 8.8 per cent in Friday trading, while CoreWeave dropped 15.5 per cent.
The question is shifting from how much AI infrastructure can be built to how profitably it can be operated.
China adds another source of pressure
Interest rates were not the only catalyst. Reports of advances by Chinese memory-chip producer ChangXin Memory Technologies raised concerns that lower-cost Chinese products could increase competition across the global semiconductor industry.
Memory chips are essential to AI systems, but the industry is historically cyclical. Periods of tight supply and high pricing can encourage rapid investment, eventually producing oversupply and falling margins.
The prospect of a well-funded Chinese competitor expanding its technological capabilities unsettled investors in Samsung, SK Hynix and Micron. It also demonstrated that AI-related demand does not insulate chipmakers from conventional competitive pressures.
That combination—slower rate cuts, more expensive financing and potentially cheaper supply—challenged the assumption that every company exposed to AI would enjoy continually expanding margins.
A reset rather than the end of the boom
The sell-off does not establish that the AI boom is ending. Demand for computing power remains strong, the largest technology companies continue to generate formidable cash flows and many infrastructure projects are backed by long-term customer contracts.
What has changed is the market’s willingness to overlook the price and financing structure of that growth.
The most resilient companies are likely to be those able to fund investment from operating cash flow, secure long-duration customers and demonstrate that new capacity will earn returns comfortably above its financing costs.
More speculative operators may face greater scrutiny, particularly where debt is expensive, customers are concentrated or expected revenue depends on demand that has not yet materialised.
For Australian investors, the lesson extends beyond US technology shares. Local data-centre operators, infrastructure funds, electricity suppliers and property groups are increasingly exposed to the same investment cycle.
Artificial intelligence may remain one of the defining growth themes of the decade. But last week’s correction showed that enthusiasm for the technology does not eliminate financial discipline.
The next stage of the AI boom will be judged not only by computing power, model performance or demand for chips, but by something more traditional: whether the assets being financed can generate enough cash to repay the money borrowed to build them.
Fact box
Nasdaq Composite: Down 4.5 per cent for the week ended October 16, 2026
Philadelphia Semiconductor Index: Down approximately 11.4 per cent
Micron Technology: Down approximately 14.6 per cent
Samsung Electronics: Down approximately 18 per cent
SK Hynix: Down approximately 24 per cent
US September inflation: 3.7 per cent annually
Estimated 2026 AI-related investment-grade issuance: Approximately US$300 billion
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Here’s how they are looking at artificial intelligence, interest rates and economic pressures.
