Source: thredUP
It’s good to be thredUP. The online consignment shop and thrift store posted results that exceeded its own internal expectations as well as Wall Street’s, and the signs are promising for continuing growth opportunities ahead.
The company, which concluded a successful initial public offering in March, posted revenues of $56 million, 15.2 percent higher than the same period last year. Orders placed on the site were up 18 percent year-over-year as thredUP attracted 1.29 million buyers, a 14 percent gain. ThredUP reported that it saw sales improvements month-to-month in the quarter with repeat buyers accounting for 80 percent of orders and first-timers representing the balance.
Gross profits at thredUP were up 71.3 percent boosted by increased revenues coming from consignment sales, greater overall scale plus efficiencies gained as a result of a new distribution center in Georgia.
Co-founder and CEO James Reinhart said on an earnings call yesterday with analysts that thredUP expects to bring another DC online by the middle of next year.
“Keep in mind that every facility we build tends to be larger and more automated than our previous facilities. Size and automation translates into increased revenue capacity and higher operating margins,” he said.
Mr. Reinhart cited factors and forecasts that all point to growing success for thredUP.
He referenced GlobalData research that expects resale to grow at 25 times the rate of traditional retail in the coming years. The eco-benefits of resale are among the motivating factors for buyers in the key Millennial and Gen Z demographics.
Ultimately, thredUP’s success will be determined by its access to goods and its ability to assure quality and expedited turnaround times for both sellers and buyers.
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ThredUP expects to eventually process a billion items for resale every year, up from just over a million last year. “We are confident in the long-term supply opportunity,” Mr. Reinhart said.
The company is “relentlessly investing” in tech and software to quickly move through its “rigorous 12-point quality inspection” process and grow its inventory, according to its CEO.
“We aren't thinking about the next 100 million items,” he said. “We're thinking about the next billion items. We're building the backbone for resale on the internet, 35,000 brands across 100 categories. And our goal is to power a disproportionate part of this industry over time.”