Following our analysis on how secondhand and thrift were back in style, thredUP--the online resale/circular service provider for brands like REI, Patagonia, and others--reported an improved trajectory in its business and raised its guidance for the year. (For context, thredUP is similar to Fulfillment by Amazon for resale, plus it does first-party consignment for individuals.) New thredUP customers during the period included H&M and American Eagle. Consignment revenue increased +24% quarter-over-quarter (compared to +6% LY) and the YoY decline moderated to -2% versus -15% in 2H 2022. Gross margin improved to 67% from 63% in Q4 2022. CEO James Reinhart noted that the company has, “seen active buyer trends improve each month of this year.”
As can be seen in Placer.ai, brick-and-mortar thrift store brands have maintained their good momentum over the past month and have retained their traffic levels compared to 2019, in contrast to most retail categories that are seeing visits below pre-pandemic levels. This viewpoint is also supported by Savers Value Village‘s Q1 2023 results which included a sequentially stronger comparable-store increase of +5.6% (and +30% relative to 2019), and up sequentially from +4.3% in Q4 2022 (which represented a +28% increase relative to 2019). Additionally, gross margins expanded to 57.8%, from 56.0% in Q1 2022. Margins were up on better price realization (given the strong demand and efficiencies). We expect these same dynamics to result in strong gross margin results for most of the off-price retailers as well.
