Investors clearly want a piece of the billions of dollars locked away in consumers’ closets — and the newly public Poshmark Inc.
Shares of the social selling company shot up 141.7 percent to $101.50 during their first day on the Nasdaq stock exchange, where they trade under the “POSH” ticker.
That gave Poshmark a market capitalization of $7.4 billion, putting the nine-year-old company ahead of many fashion stalwarts, including Macy’s Inc. (with a market cap of $4.3 billion), Nordstrom Inc. ($6 billion), Columbia Sportswear Co. ($6.2 billion) and Michael Kors parent Capri Holdings Ltd. ($6.6 billion).
And while that speaks to the presence Poshmark has developed and its potential to grab more market share, cofounder, president and chief executive officer Manish Chandra told WWD the platform could also become a tool for brands to reach customers.
“When you think of the future of shopping, people think that secondhand and new are separate,” Chandra said. “We think they integrate.”
He said brands could find that many of their customers are on Poshmark and increasingly reach them through the platform, which seeks to digitally bring back some of the touch and feel that was lost as mom-and-pop stores gave way to larger and largely self-service retailers.
While the general mission is, as Chandra said, “making shopping simple, social and sustainable,” he added the Poshmark secret sauce was really in the social aspect where buyers and sellers can interact in real and personal ways.
“What we’re doing is bringing all that joy back into online selling,” he said. “We’re really empowering all types of sellers.”
From Wall Street’s perspective, it doesn’t hurt that Poshmark is doing that with an “asset light” model that has the company making connections, but not ever having to touch inventory.
That means the business is “scalable” — and able to grow sales much quicker than costs, an approach that served Silicon Valley so well, but one that fashion has had difficulty putting to work.
Poshmark is empowered with $277 million raised in the offering, a new kind of currency with a publicly traded stock and a higher profile on Wall Street and can use those advantages to expand.
Already, the firm has 30 million-plus active users who spend an average of 27 minutes a day on the site spurring on 20.5 billion social interactions. That includes 6.2 million active buyers and 4.5 million active sellers who can turn to their own closets to suddenly monetize the most nuanced of trends.
Chandra said when the pandemic hit, it was the sellers who pivoted to stay-at-home looks like sweatpants to meet a growing need in the market. “They are very quick to remerchandise to where the world is going,” he said.
Poshmark doesn’t need to pick the trend and can handle multiple trends at once while empowering people who use the site to sell.
Most of the $1.3 billion in gross merchandise volume handled by Poshmark annually comes from the U.S., but Chandra said the model can accommodate many more users and readily translates to other markets.
For the first nine months of last year, revenues rose 28 percent to $192.8 million as profits hit $20.9 million.
The Poshmark offering is being watched closely not just for what it says about the future of fashion, but also for what it means for a mini wave of other companies looking to take advantage of a market that is still very strong considering the economic wreckage from the continuing pandemic.
Stocks have been buoyed by Washington and the billions of dollars regulators and lawmakers have pumped into the system. German e-commerce site Mytheresa as well as British footwear brand Dr. Martens are also prepping for the spotlight of the public market.
Poshmark is setting the bar high for those companies.
Chandra, though, is staying low-key, as is clearly his nature.
The CEO owns six million of the company’s shares, a stake that was valued at more than $611 million by the close of business Thursday.
Asked about the mammoth haul, he offered a very grounded: “I’m pleased. I have two grown-up kids. Life has been great. We have amazing kids — amazing family, wonderful wife — that’s really where we’re focused.
“We’re focused on our mission [at Poshmark] and if the mission leads to money, fantastic,” he said. “Otherwise, we’re still focused on that mission. We have a lot of work to do.”
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