Apparently everyone is thrift shopping and some of us are still buying new clothes.
Two longtime department stores, blindsided over the years by too many trends to list here, decided not to wait around to find out if that’s an exaggeration.
J.C. Penney and Macy’s announced partnerships last week with thredUP, which says it’s the largest online secondhand shopping destination. Many people haven’t heard of thredUP, but that’s changing now as it goes mainstream with its new mall partners. ThredUP is also flush with $175 million in new funding disclosed this week as it expands its resale-as-a-service business.
ThredUP appears in well-marked 500 to 1,000-square-foot sections inside 30 J.C. Penney stores and 40 Macy’s. Penney hasn’t disclosed its list of cities yet. To see it in Dallas, go to the Penney store in Timber Creek Crossing on Skillman St.
Macy’s decided not to add it to a store in Dallas-Fort Worth yet. But thredUp is now in three of its Texas Macy’s stores at La Plaza Mall in McAllen, Willowbrook Mall in Houston and Pearland Town Center outside of Houston.
ThredUP commissioned a now widely quoted report from GlobalData PLC that put the resale apparel market at $7 billion last year. That total is an estimate of its sales along with sales from The RealReal, which went public in June, Poshmark, eBay, Plato’s Closet, Buffalo Exchange and a host of others.
Both J.C. Penney, with sales last year of $12 billion, and Macy’s sales last year of $25.7 billion, dwarf the resale market. But that’s not the point. The resale apparel market is expected to triple by 2023 to $23 billion. That’s on top of an estimated $28 billion by 2023 of secondhand apparel sold to thrift stores and given as donations.
The trend is up for resale apparel and the trend has been down for department stores, which as a group has been shrinking every year since sales peaked in 1999. And 64% of women in America said they have or are willing to buy secondhand products, up from 45% two years ago, according to the GlobalData research.
ThredUP is starting slow with the Penney and Macy’s partnerships. The two department store retailers can hope their new partner learned a lot in the past year working with Houston-based Stage Stores. ThredUP has been operating shops in 44 of the regional department store chain’s Palais Royal, Peebles, Bealls and Stage stores in Texas, Louisiana, Kentucky and Virginia.
Expect to see more of this because Wall Street likes its prospects.
Department stores need to focus on bringing in younger shoppers, said Oliver Chen, a retail analyst at Cowen & Co. Specifically for Penney, the thredUP partnership “is an exciting opportunity and look for the retailer to scale it to a greater number of stores in the future.”
Millennial and Gen Z consumers are interested in a more eco-friendly way of shopping. They also don’t carry the baggage of their parents’ generations who weren’t interested in secondhand until maybe the Great Recession and until luxury prices moved into the stratosphere.