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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Sales of used clothing are growing online, ThredUp CEO James Reinhart told CNBC’s Squawk Alley on Friday, just before the company’s shares began trading on the Nasdaq Global Select Market.
The company announced Thursday afternoon the price of its initial public offering of its Class A common shares at $ 14 per share, at the top of estimates, and sold 12 million shares to raise 168 million of dollars.
Shares rose nearly 43 percent to $ 20 at the close of trading.
“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, California, ThredUp is an online retail marketplace where consumers can buy and sell second-hand clothing, shoes and accessories. The website includes approximately 2.4 million listings from over 35,000 brands at any given time.
According to ThredUp’s annual report, the second-hand market is estimated to be worth $ 28 billion. The company expects it to increase to $ 64 billion by 2024 as more consumers switch to used clothing due to the environmental concerns of fast fashion. The coronavirus pandemic has also boosted 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 earned revenue of $ 186 million, 14% more than the previous year.
The number of active buyers grew 24% last year, Reinhart told CNBC. In addition, 77% of product supply comes from repeat sellers, that is, sellers who have previously sold to ThredUp.
“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 getting supply,” he said.
When asked about post-pandemic trends and whether buyers will continue to look for their resale as people buy back in person, Reinhart remains unreliable on the platform’s confidence for years to come.
“I think we are still in recession [after the pandemic], and there are still some community members who suffer, so ThredUp offers great brands and great prices, ”he said, adding that stimulus controls will also encourage people to buy used.
ThredUp has about 21 partnerships with retailers like Walmart to help brands expand their product offering.
“It’s about how they can get their customers to buy more sustainably,” he said. “It actually talks about the breadth of the program we built, and I think it augurs a bright future for resale and it works on it.”