thredUP Co-Founder & CEO James Reinhart speaks onstage during TechCrunch Disrupt San Francisco 2019 at Moscone Convention Center on October 02, 2019 in San Francisco, California.
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Sales of used clothing are booming online, ThredUp CEO James Reinhart told CNBC’s Squawk Alley on Friday just before the company’s shares began trading in the Nasdaq Global Select Market.
The company late Thursday announced the pricing of its initial public offering of its Class A common stock at $14 a share, on the high side of estimates, and sold 12 million shares to raise $168 million.
Shares jumped nearly 30% in 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 deal.
Based in Oakland, Calif., ThredUp is an online resale marketplace where consumers can buy and sell secondhand clothing, shoes and accessories. The website features about 2.4 million listings from over 35,000 brands at any given time.
The secondhand market is estimated to be worth $28 billion, according to ThredUp’s annual report. The company expects it to increase to $64 billion by 2024 as more consumers shift to used clothing due to environmental concerns from fast fashion. The Coronavirus pandemic has also driven growth as consumers look to save and earn money by buying fashion at lower prices or selling clothing on the company’s platform.
Last year, the company brought in $186 million in revenue, an increase of 14% from the previous year.
The number of active buyers grew 24% last year, Reinhart told CNBC. In addition, 77% of its product supply comes from repeat sellers, meaning sellers who have previously sold on ThredUp before.
“It’s one of the unique value propositions that we’ve been able to provide and so sellers come to us organically and we’ve never had a problem grabbing supply,” he said.
When asked about post-pandemic trends and whether shoppers will continue to look to resale as people return to shopping in person, Reinhart remains undeterred in his confidence of the platform for years to come.
“I think we’re still going to be in a recession [after the pandemic], and there’s still some some members of the community that are suffering and so ThredUp provides great brands and great prices,” he said, adding the stimulus checks will also spur people into purchasing used.
ThredUp has about 21 partnerships with retailers like Walmart to help brands expand its product offerings.
“It’s about how they can get their customers to shop more sustainably” he said. “It actually speaks to the breadth of the program that we built, and I think portends a bright future for resale, and that work in it.”