ThredUP co-founder and CEO James Reinhart speaks on stage during TechCrunch Disrupt San Francisco 2019 at the Moscone Convention Center on October 2, 2019 in San Francisco, California.
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Used clothing sales are booming online, ThredUp CEO James Reinhart told CNBC’s Squawk Alley on Friday, just before the company’s shares began trading on the global Nasdaq market.
The company announced late Thursday the price of its initial public offering of its common Class A shares at $ 14 per share, on top of estimates, and sold 12 million shares to raise $ 168 million.
Shares rose nearly 30% on initial trading on Friday.
“I think this is a category that’s big, it’s getting bigger,” Reinhart told CNBC.
Nine banks, led by Goldman Sachs, Morgan Stanley and Barclays, are participating in the trading.
Based in Oakland, California, ThredUp is an online resale market where consumers can buy and sell used clothing, footwear and accessories. The website contains approximately 2.4 million records from over 35,000 brands at any given time.
The second-hand market is estimated at $ 28 billion, according to ThredUp’s annual report. The company expects to grow to $ 64 billion by 2024, as more consumers switch to worn-out clothing due to environmental concerns due to fast fashion. The coronavirus pandemic has also stimulated growth, as consumers seek to save and make money by buying fashion at lower prices or selling clothes on the company’s platform.
Last year, the company brought in revenue of $ 186 million, an increase of 14% over the previous year.
The number of active buyers rose 24 percent last year, Reinhart told CNBC. In addition, 77% of its product offering comes from repeat sellers, ie sellers who have previously sold on ThredUp before.
“It’s one of the unique value propositions we’ve been able to provide, so sellers come to us organically and we’ve never had a problem taking supply,” he said.
When asked about post-pandemic trends and whether buyers will continue to seek resale as people return to shopping in person, Reinhart remains steadfast in his confidence in the platform for years to come.
“I think we will still be in a recession [after the pandemic]”And there are still some members of the community who are suffering, so ThredUp offers great brands and great prices,” he said, adding that incentive checks will also encourage people to buy used products.
ThredUp has approximately 21 partnerships with retailers such as Walmart to help brands expand their product offering.
“It’s about how they can get their customers to buy more sustainably,” he said. “In fact, it talks about the scale of the program that we have built and I think it has a bright future for resale and it works.”