ThredUp continued to grow during its first year as a public company — and is building more capacity to keep bringing resale to more consumers, individual sellers and fashion brands.
But while chief executive officer and cofounder James Reinhart argued strongly that resale is the future of retail, he also acknowledged some changes in the landscape.
“We get it,” Reinhart told analysts on a conference call on Monday after reporting big annual revenue gains and continued losses. “We are operating in a different macro context.”
ThredUp went public nearly a year ago and the stock came out of the gate strong, with an IPO at $14 a share that saw it close at $20 on its first day. But the stock — part of a wave of IPOs in fashion last year — hasn’t been able to maintain that level and, after the financial update on Monday, fell 9.8 percent to $6.81 in afterhours trading, in what has rapidly become a tough stock market driven down by fears over Russia’s invasion of Ukraine.
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Reinhart laid out how spending on more dedicated centers to process used apparel and the acquisition of the Remix resale business in Europe would help fuel continued growth and that outside scrutiny would help strengthen the company.
“We are on a mission to build a generation-defining company that changes the way the world shops,” the CEO said.
And that, to some degree, also means changing the way retailers sell.
ThredUp has a growing resale as a service business, powering resale from Walmart to Adidas to Madewell with a total of 28 customers.
“We continue to believe that every brand will have a resale strategy and ThredUp will be the premium provider of end-to-end resale services,” the CEO said.
The company offers three main services — cleanout, a cashout marketplace and a full-service resale shop. The suite, which ThredUP calls “Resale 360,” can help brands get started in retail for free and in some cases within 30 days.
For the fourth quarter, the company registered net losses of $17.9 million which compared with losses of $17 million a year earlier. Revenues for the three months ended Dec. 31 jumped 68 percent to $72.9 million from $43.4 million.
Annual net losses tallied $63.2 million and compared with losses of $47.9 million in 2020. Revenues increased 35.4 percent to $251.8 million from $186 million.
This year, ThredUp is looking for revenues to grow to a range of $330 million to $340 million.
“Investors are super focused on the numbers right now and where things are headed around path to profit and stuff and I think that misses the bigger picture,” Reinhart told WWD in an interview. “We’re being very strategic around the investments we make that build real competitive advantage.”
He likened it to the playbook used by Amazon during its early days.
Reinhart also noted that there were some more signs that the world was coming his way, particularly the New York Fashion Act, which could require larger companies to map 50 percent of their supply chain and report environmental and social responsibility metrics.
The CEO said that was a sign that momentum is building and he sees resales as part of the solution.
“I think we’re in the opening of this play,” Reinhart said. “If you don’t start preparing now, it could be very painful down the line.”
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