How looting can fuel online resellers' "circular economy"
There's one big non-political reason why luxury stores were targeted by looters: Their wares can now be sold for top dollar, thanks to the rise of what is often known as the "circular economy."
Why it matters: The illegal act of looting is not new. What is new is that stores like Chanel and Louis Vuitton are getting looted, rather than a QuikTrip gas station or a grocery store in East Flatbush. Instead of stealing goods they need to live, looters are increasingly stealing the goods they can most easily sell online.
What they're saying: Fashion designer Marc Jacobs, whose stores were looted, declared on Instagram that looting is not violence, while white supremacy is. "Property can be replaced," he wrote. "Human lives cannot."
- Looting a major luxury brand's retail store is a largely victimless crime, one that sends a message about disrespect for (white) authority and the necessity of wealth redistribution.
- Economically speaking, looting can have positive effects. Rebuilding and restocking stores increases demand for goods and labor, especially during a pandemic when millions of workers are otherwise unemployed.
- It also generates cash for the looters.
How it works: Only a few years ago, it was difficult and expensive to fence a luxury handbag or a designer jacket. If you were well connected in the criminal underworld, you might be able to get 30% of the retail price for such an item.
- Today, authenticating and selling sought-after goods for retail price or higher is as easy as logging on to websites like StockX, The RealReal, or Vestiaire Collective.
- "They do not check to see how you got the item, or where you got it from," says sneaker expert and former Axios reporter Michael Sykes. "The whole system feels kinda nefarious in a way."
The fine print: The StockX terms and conditions indemnify StockX from any liability from the sale of stolen goods.
- A StockX spokesperson sent a statement saying that the company "will take any available measures to prevent the sale of stolen goods."
- The RealReal told Axios that they're "working closely with local and federal law enforcement to prevent the trafficking of stolen goods," including sharing "details like serial numbers, photos, and data and location of consignment that can help prevent the sale of stolen goods."
Vestiaire Collective reserves the right to demand that sellers "immediately provide all documents proving their ownership of the Products that are offered for sale and/or the origin of these Products."
- A spokesperson tells Axios that Vestiaire has "a process in place to collaborate with local law enforcement to prevent the trafficking of stolen goods."
The bottom line: The circular economy helps to reduce waste and can efficiently keep luxury goods in the hands of those who value them most highly. But while internet platforms are good at guaranteeing authenticity, they can't guarantee that the items for sale aren't stolen.