At ThredUp‘s 600,000-square-foot warehouse in Suwanee, Georgia, roughly 40,000 items of used clothes are processed every day. The corporate’s logistics community — 4 amenities throughout the U.S. — now rivals that of some fast-fashion giants.
“That is the most important garment-on-hanger system on the planet,” stated Justin Pina, ThredUp’s senior director of operations. “We are able to maintain greater than 3.5 million gadgets right here.”
Secondhand buying is booming. The worldwide secondhand attire market is predicted to achieve $367 billion by 2029, rising nearly 3 times sooner than the general attire market, in accordance with GlobalData.
President Donald Trump’s tariffs have been billed as a option to carry manufacturing again residence. However the measures hit considered one of America’s most import-dependent industries: style.
About 97 p.c of clothes offered within the U.S. is imported, principally from China, Vietnam, Bangladesh and India, in accordance with the American Attire and Footwear Affiliation.
For years, Gen Z customers have been driving the rise of secondhand style, however now extra Individuals are catching on.
“When tariffs elevate these prices, resale platforms instantly seem like the good purchase. This is not only a fad,” stated Jasmine Enberg, co-CEO of Scalable. “Tariffs are accelerating traits that have been already reshaping the best way Individuals store.”
For James Reinhart, ThredUp’s CEO, the corporate is already seeing it play out.
“The enterprise is free-cash-flow optimistic and rising double digits,” stated Reinhart. “We really feel actually good in regards to the economics, gross margins close to 80% and operations constructed totally throughout the U.S.”
ThredUp reported that income grew 34% yr over yr within the third quarter. The corporate additionally stated it acquired extra new clients within the quarter than at every other time in its historical past, with new purchaser development up 54% from the identical interval final yr.
“If tariffs add 20% to 30% to retail costs, that is an enormous benefit for resale,” stated Dylan Carden, analysis analyst at William Blair & Firm. “Pre-owned gadgets aren’t topic to these duties, so demand naturally shifts.”
Contained in the ThredUp warehouse, the place CNBC acquired a behind-the-scenes look. automation hums alongside human employees. AI techniques {photograph}, categorize, and value 1000’s of clothes per hour. For Reinhart, the know-how is vital to scaling resale like retail.
“AI has actually accelerated adoption,” stated Reinhart. “It is serving to us enhance discovery, styling, and personalization for consumers.”
That tech wave extends past ThredUp. Style-tech startups Phia, co-founded by Phoebe Gates and Sophia Kianni, is utilizing AI to scan 1000’s of listings throughout retail and resale in seconds.
“The truth that we have pushed hundreds of thousands in transaction quantity exhibits how massive this want is,” Gates stated. “Individuals need smarter, cheaper methods to buy.”
ThredUp is betting that home infrastructure, automation, and AI will hold it forward of the curve, and that tariffs meant to revive U.S. manufacturing may find yourself powering a brand new type of American style economic system.
“The way forward for style shall be extra sustainable than it’s as we speak,” stated Reinhart. “And secondhand shall be on the middle of it.”
Watch the video to be taught extra.