James Reinhart, co-founder and CEO of thredUP, speaks on stage during the 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 traded on the Nasdaq Global Select Market.
The company announced late Thursday that it was pricing its Class A common stock at $ 14 per share and sold 12 million shares to raise $ 168 million.
Shares rose nearly 43% to $ 20 at close of trade.
“I think this is a category that is big and it’s getting bigger,” Reinhart told CNBC.
Nine banks, led by Goldman Sachs, Morgan Stanley and Barclays, are participating in the deal.
ThredUp, based in Oakland, Calif., Is an online resale marketplace where consumers can buy and sell used clothing, shoes, and accessories. The website offers around 2.4 million entries from over 35,000 brands at any given time.
According to ThredUp’s annual report, the second-hand market is estimated at $ 28 billion. The company predicts it will climb to $ 64 billion by 2024 as more consumers switch to used clothing due to environmental issues posed by fast fashion. The coronavirus pandemic has also spurred growth as consumers want to save and make money by buying fashion at lower prices or selling clothing on the company’s platform.
Last year the company had sales of $ 186 million, an increase of 14% over the previous year.
The number of active buyers rose 24% in the past year, Reinhart told CNBC. Additionally, 77% of the product offering comes from resellers, meaning sellers who have previously sold on ThredUp.
“It’s one of the most unique value propositions we’ve been able to offer, and that’s how sellers come to us organically and we’ve never had a problem sourcing the listing,” he said.
When asked about post-pandemic trends and whether buyers will continue to be on the lookout for a resale when people shop in person again, Reinhart will remain undeterred by his trust in the platform in the coming years.
“I think we will still find ourselves in a recession [after the pandemic]and there are still some members of the community who are suffering, so ThredUp has great brands and great prices, “he said. Adding the stimulus checks will also encourage people to buy used products.
ThredUp has approximately 21 partnerships with retailers like Walmart to help brands expand their 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 we’ve created and I think it’s a bright future for reselling and that works in it.”