ThredUp, Poshmark, The RealReal earnings show three paths for resale’s future – Glossy

ThredUp has seen a 14% increase in purchases of dresses since October, showing that event season has resumed. And the company launched its holiday shop, complete with selections of party-perfect pieces, last week. The company expects full-year revenue in the range of $248 million to $250 million. As its market remains solely the U.S., it has avoided the global supply chain issues that have plagued other retailers. This has allowed ThredUp to strategically lower prices, by 15%, to reflect customers’ decrease in disposable income.

Bucking supply chain trends
Meanwhile, Poshmark has been expanding internationally. The company began selling in India in September, its first entry into Asia. It also acquired Suede One, a sneaker authentication software company, in October, signaling its intent to compete more directly with sneaker-focused resale companies like StockX and GOAT. Despite the company’s expansion, CEO Manish Chandra said on the company’s earnings call on Tuesday that he isn’t concerned about global supply chain or inventory issues.

“Our asset-light model, which is both adaptable and responsive to changing consumer demands and insulated from supply chain disruption, is uniquely positioned to thrive in the current environment,” Chandra said. Since Poshmark is peer-to-peer, Chandra said the issues with sourcing and materials that are affecting other fashion companies shouldn’t be an issue for Poshmark.

Julie Wainwright, founder and CEO of The RealReal, said during the company’s earnings call that she too is confident that TheRealReal can weather the supply chain storm.

“Based on what we know today, we believe the operational and supply impacts to our business from Covid-19 are effectively behind us, and we are well-positioned for a strong holiday season,” Wainwright said. “We believe The RealReal’s unique business model is largely insulated from the supply chain shortages and certain inflationary impacts many retailers are experiencing.” 

Creating more defined points of view
Going forward into 2022, ThredUp will be working to reduce wait times of order deliveries, in part through a new distribution center that will be based out of Dallas, Texas. Reportedly, it will be its most automated facility and expansive, with four levels. As such, it is expected to expand item capacity by 150% across its distribution center network to 16.5 million items and bring 2,000 jobs to Dallas-Fort Worth area. In its 2021 Resale Report, ThredUp reported that 52.6 million Americans resold apparel in 2020, and 76% of people who have never resold clothing are open to trying it.

Meanwhile, The RealReal is positioning itself as a sustainable answer to luxury, as the largest online marketplace for authenticated, consigned goods. Its consignment and service revenue was $89.5 million, an increase of 39% and 30% compared to the same periods in 2020 and 2019, respectively. It also reported that, from its inception in 2011 through Sept. 30, 2021, its consignment business has saved nearly 22,000 metric tons of carbon and more than 1 billion liters of water.

Growth plans
The RealReal is looking at new projects in 2022 to continue growing, including coming out with fresh iterations of its upcycled collections and, potentially, an in-house private label.

“The hard part isn’t launching a private brand, though. It’s making it successful over time,” said Andy Ruben, CEO and founder of resale tech company Trove. Ruben said companies like The RealReal that already have large built-in audiences will have an easier time growing private labels. “Brands typically need years to build and refine their businesses and hundreds of millions in investment. That’s why I remain far more bullish on the [notion that the] brands we already know will win the resale space over the long term.”

Elsewhere, ThredUp’s RAS (resale-as-service) offering has been very popular, with over two dozen brands including Adidas now using its distribution and existing system to manage unsold inventory and worn items. ThredUp reported on Monday that it has stopped its personal stylist Goody Box service, as it was too difficult to scale efficiently. That capital will instead be put toward other projects. The company is also hoping to expand its white-label offering, providing resale logistics to companies like Farfetch without the brand presence of ThredUp.

The brand also highlighted its acquisition of European resale service Remix, which closed in October, in its earnings report. Owning the platform will allow for a foothold in Europe, where forecasts show that resale will account for $39 billion by 2025. Remix covers nine countries. ThredUp’s focus will be on leveraging Remix’s market intelligence and technology.

ThredUp will be moving the company toward a consignment-based model, which will impede growth in the near term. It will focus on its core marketplace growth in 2022, then on RAS in 2023. Among other investments for ThredUp came a minority stake in Latin American Vopero in October, a resale platform popular in the local market.

And Poshmark has set its sights on working directly with brands. In October, the company launched Brand Closets, a way for fashion companies to sell new products directly to consumers through the Poshmark platform. This effectively makes it a hybrid of a resale platform and a primary marketplace.