High consumer costs expose fast fashion's hidden expenses, boosting luxury resale value

With consumers under sustained financial pressure, purchasing decisions are being held to a higher standard. The case that a R20,000 Burberry coat represents better value than a R5,299 fast fashion one is, on the surface, a difficult argument to make. Look closer, and it becomes surprisingly difficult to refute.

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A consumer who buys the cheaper coat and wears it five days a week over a 13-week winter will need to replace it after two seasons. At R5,299, that works out to R40.76 per wear, and with a resale value of R1,700 at best, the net spend is R3,599, or R27.68 per wear, assuming it sells at all.

Most end up in landfill, contributing to the estimated 92 million tonnes of textile waste the global fashion industry generates annually.

Pre-owned at R20,000 and worn with identical frequency, the Burberry coat delivers 650 wears over a decade. Unlike its mass-market counterpart, it appreciates at roughly 8% to 10% in value annually, based on resale trends observed by Luxity.

When the time comes to sell, the luxury reseller typically returns 70% of the original purchase price in store credit, which, on a R20,000 coat, amounts to R14,000. That brings the net spend down to R6,000 across 650 wears, or R9.23 per wear.

"When budgets tighten, the questions people ask about purchases get sharper," says Michael Zahariev, co-Founder of Luxity.

"How long will this last? What will I get back when I sell it? A well-chosen luxury piece answers both. Fast fashion rarely survives those questions."

This Burberry coat is not an isolated case.

Across the luxury category, the same pattern holds: items built to last, from brands with genuine heritage, tend to hold or increase their value over time.

In South Africa, Rolex watches resell at an average of 126.5% of retail, meaning buyers routinely recover more than they paid. The Chanel Medium Classic Flap has appreciated so consistently over the past two decades that it has been classified alongside traditional store-of-value assets like gold.

For South African consumers navigating rising costs, accessibility is increasingly practical rather than aspirational.

Buying a Chanel handbag or a Hermès scarf through the resale market at a fraction of its original retail price represents a materially different financial proposition than a mass-market alternative that is worthless within two years.

"Fast fashion carries a bill that only becomes visible over time - cheap at the till and expensive in the long run," notes Zahariev. "Quality lasts, it retains value, and when you are done with it, someone else can wear it. That is financial literacy, not luxury indulgence."

“Buying less and buying better is simply financial literacy dressed well," concludes Zahariev.