Does the Circular Economy Stabilize Brand Value? Investigating the Correlation between Resale Market Price Resilience and Primary Market Demand for High-End Sustainable Fashion (2022–2025)

Abstract

Luxury fashion houses have long treated the resale market as a threat: a channel that eats into full-price sales and slowly cheapens the brand. This study asks whether that belief still holds for high-end sustainable fashion. Between 2022 and 2025, the quarterly Value Retention Rate (VRR) of 150 core products from Stella McCartney, Gabriela Hearst and Patagonia was tracked on three authenticated resale platforms and compared with a control group of 50 trend-driven items from conventional luxury labels that have no visible circularity program. Primary demand was measured through a composite Primary Demand Index (PDI) built from public revenue disclosures, purchase-intent search volume and full-price sell-through. Over sixteen quarters, the mean VRR of the sustainable cohort rose by 7.38 percentage points, while that of the control cohort fell by 4.23 points. Resale value retention and primary demand moved together very closely (r = 0.990, p < 0.001), and the association was marginally stronger when resale prices were lagged by one or two quarters. A robustness check on quarter-to-quarter changes, however, produced a much weaker relationship, strongest at a one-quarter lag (r = 0.46, p = 0.096), which shows that a large part of the headline correlation reflects both series rising over the same period. Taken together, the evidence does not support the cannibalization view. It is consistent with the idea that buyers read stable resale prices as a lower “True Cost of Ownership”, although a longer data series is needed before any causal claim can be made.