The success story of Smala: From struggling to profitable in the second-hand children’s market

In 2023, the SME generated a turnover of 7 million euros, an increase of 35%. And for the current financial year, Aude Viaud, co-founder of Smala, expects an increase of 15%. “We will focus on profitability.” In this ultra-competitive market where several players have already had to withdraw, the Nantes SME has succeeded in establishing a viable economic model by automating its processes and optimizing its costs as much as possible.

Unlike certain platforms where transactions are carried out between individuals, Smala has set up a purchase-resale system where the SME manages everything from A to Z. The company reports 240,000 unique references that it sources 65% from individuals from whom it buys their clothes through an already dematerialized process. 25% comes from Vertbaudet, IKKS and Jacadi, brands with which Smala has established partnerships and for six months, the company has also included new products from clearance sales in its catalog.

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3,500 pieces per day

Installed in a 3,600 m2 warehouse on the outskirts of Nantes, Smala moves 3,500 pieces in and out per day. Before being shipped, each product is sorted, ironed, photographed and, of course, posted online. And it is on these stages that the company has, for two years, worked extremely hard on its now highly automated process, while seeking to optimize its operational costs. Today, Smala estimates that it generates a gross margin of 65% on an average resale price of an item ranging between 8 and 10 euros.

Optimized logistics processes

Concretely, technology is at the service of productivity, as in the “photo” stage. “We have developed our own tools in order to be able to take a photo of an article, in a few seconds, with the right framing and without clipping”, details Aude Viaud. This operation only requires one person instead of two previously. Overall, Smala went from 7 to 2 minutes to receive a piece of clothing and put it online.

On the order preparation side, the process has also been carefully studied, with optimized order paths for these stages carried out by the warehouse teams, i.e. 35 employees out of the company's 45. “We are in a logic of continuous logistics optimization. We have our own systems. This therefore allows us to be very reactive in adapting them and making them evolve.”

The potential of AI

On the marketing side rather than investing “in acquisition”, the brand focuses, with 80,000 active customers, today on loyalty actions. “The name change allowed us to acquire many new customers, with a stronger identity and a brand that makes second-hand more desirable. And that has a snowball effect.” In its multiple projects, Smala is now studying the benefit of integrating artificial intelligence into its logistics processes. Enough to allow him “to anchor this profitability achieved”.

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