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 started trading on the Nasdaq Global Select Market.
The company announced on Thursday the price of its initial public offering of Class A common shares at $ 14 per share, on the high side of the estimates, and sold 12 million shares to raise $ 168 million.
The shares rose almost 43%, to $ 20 at the close of trading.
“I think this category is big, it’s getting bigger and 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 resale market where consumers can buy and sell second-hand clothes, shoes and accessories. The site features about 2.4 million listings from over 35,000 brands at any given time.
The second-hand market is estimated at $ 28 billion, according to ThredUp’s annual report. The company expects it to increase to $ 64 billion by 2024, as more consumers switch to used clothing due to fast fashion’s environmental concerns. The Coronavirus pandemic has also spurred growth as consumers seek to save and make money by buying fashion at lower prices or by selling clothes on the company’s platform.
Last year, the company achieved revenues of US $ 186 million, an increase of 14% over the previous year.
The number of active buyers grew by 24% last year, Reinhart told CNBC. In addition, 77% of its product supply comes from frequent sellers, that is, sellers who have sold on ThredUp before.
“It is one of the unique value propositions that we have been able to provide and therefore the sellers come to us organically and we have never had a problem getting supplies,” he said.
When asked about post-pandemic trends and whether buyers will continue to look for resellers as people buy back in person, Reinhart remains relentless in his confidence in the platform for years to come.
“I think we will still be in a recession [after the pandemic], and there are still some members of the community who are suffering, so ThredUp offers great brands and great prices, “he said, adding that stimulus checks will also encourage people to buy used ones.
ThredUp has about 21 partnerships with retailers like Walmart to help brands expand their product offerings.
“It’s about how they can make their customers buy more sustainably,” he said. “In fact, it talks about the breadth of the program we built and I think it foreshadows a bright future for resale and that works on that.”