U.K. Resale Site Cudoni Shuts Down Three Months After eBay-led Fundraise
LONDON — It’s not easy being green, especially if you’re a start-up.
On Friday, the U.K.-based luxury resale site Cudoni said it was closing, three months after raising 7.5 million pounds in a funding round led by eBay’s venture arm.
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Cudoni alerted its customers by email, saying it had made the “difficult decision” to close with immediate effect.
“The market and the world has seen unprecedented change, and the rising cost of living and economic crisis have been difficult to ride out for every start-up, not just ourselves,” the email said.
Cudoni added that it explored every option available, “but sadly in the current climate, it is impossible…to continue.” The company confirmed it will no longer be accepting consignment items and has begun the process of shipping all items back to their owners.
WWD has reached out to Cudoni for further comment.
Cudoni was founded by James Harford-Tyrer as a platform selling pre-owned products. In 2017, Harford-Tyrer pivoted and relaunched the platform with a focus on pre-owned luxury fashion.
Sellers could call to arrange a pickup in London, and Cudoni would value, post and sell the merchandise for a fee. Cudoni was an aggressive marketeer, pushing out products by Chanel, Tiffany & Co., Alexander McQueen, and a host of high-end labels.
It encouraged sellers to reinvest their earnings on the site, and offered rewards and discounts to those who embraced its circular proposition.
On the Cudoni website, which is still live, the company says “circularity is weaved into the fabric of our business.” The company describes itself as a “sustainable alternative to shopping new, and we believe our model is the future of retail.”
While building a circular model may be a goal for many firms, it is fraught with challenges.
It’s a crowded market, while scaling and geographical expansion are expensive, even with backers such as eBay, which led Cudoni’s 7.5 million pounds fundraise in late January.
The circular sites have also come under increased pressure from physical retail. The robust return of customers to brick-and-mortar stores following the pandemic has taken many by surprise and weighed heavily on the valuations of these start-ups, many of which were not profitable.
With interest rates rising, inflation still high, and cost-of-living crises worldwide, investors now want to see more than just runaway growth. These business models may be planet-positive, but they’re expensive to run and their lack of profitability is testing investors’ patience.
Depop, the London-based sales platform beloved of Gen Z, is just one example of how quickly fortunes can turn.
The peer-to-peer sales platform was purchased by Etsy for $1.6 billion in mid-2021. But growth slowed dramatically after lockdowns lifted, and the company notched an 85 million pound loss that same year, prompting Etsy to inject more than 15 million pounds into it.
Early last year, the London-based fashion rental subscription service Onloan also shut.
It had launched pre-COVID-19 and traded throughout lockdowns. Founders Natalie-Anne Hasseck and Tamsin Chislett said the company was poised for growth with demand outstripping supply. But the pandemic, and difficulties in raising money, meant it could no longer continue.
Luxury consignment site The RealReal has also been grappling with shareholder demands for profitability.
Earlier this year, it laid off roughly 230 employees, or 7 percent of its workforce, and revealed plans to close flagships in San Francisco in Chicago, two neighborhood stores and two consignment offices.
For the quarter ending Dec. 31, losses shrank to $39 million, down from $52 million for the same period in 2021.
The Restory, an early mover in the luxury repair space, ran into trouble earlier this year. As reported, services were suspended while the founding team resigned.
Last month, David Perez, cofounder of The Cobblers, which took a 50 percent stake in The Restory in 2022, told WWD that “liquidation is a possibility.” The site had been under pressure to produce profits, and scaling had proven costly.
There is another dynamic putting pressure on these circular start-ups: competition from luxury retailers, brands and international auction houses, which are doing a robust business in secondhand luxury.
Mytheresa and LuisaViaRoma have teamed with Vestiaire Collective on customer return and resale programs, as has Alexander McQueen.
Coach, meanwhile, has just unveiled Coachtopia, a circular collection made from leather offcuts and other upcycled waste materials. Coach is also building the Coachtopia products so they can be easily dismantled, repaired and recycled.
As reported, Selfridges has launched a storewide takeover called Worn Again, which will run until August.
The store is urging its customers to shop secondhand, swap their old clothing, and embrace repairs and upcycling. It wants customers to rethink their wardrobes, how they shop, and whether they can extend the life of their favorite things.
In the coming weeks there will be a series of Swap Shops, a charity sale and a “stock market” installed in Selfridges’ Corner Shop, where items can be valued, traded, repaired or upcycled. Customers will be able to book services such as moth-hole repair, and bespoke customization with frills, zips, appliqués and screen printing.
The retailer is also launching subscription and rent-to-buy services, and welcoming Vinterior, an online marketplace for pre-owned furniture.
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