Manish Chandra, founder and chief executive officer of Poshmark, is bringing buyers and sellers together in new ways with the peer-to-peer fashion resale platform — but he’s still looking for believers on Wall Street.
Although investors bought in big to the inventory-lite idea at the beginning of the IPO boom — pushing the stock over $100 during its introduction in January 2021 — its shares have been under pressure lately.
Poshmark shares slipped 2 cents to $9.70 in after-hours trading on Thursday as the company logged sales gains that nonetheless produced continued losses.
But Chandra told WWD in an interview that the company is building both strength and momentum and is positioned to win if the economy weakens.
“That’s really where we come in and really deliver extreme value,” the CEO told WWD. “We can be a much more effective partner to the consumer and that should be a win-win situation ultimately. If they win, we win. They win by saving money.”
The same goes on the sell side.
“In a recession, people are looking to maximize the value of everything they have, whether it’s their job or second gigs or whatever,” Chandra said.
And while inflation generally works against buyers, higher prices help the selling side of the Poshmark equation.
The platform has a little bit of everything, reflecting the breadth of so many diverse closets that have a luxury item or two hanging next to fast fashion.
“You see items selling that are $2,000, $3,000, $4,000 Chanel bags on Poshmark, and you will see a $10 T-shirt,” he said, noting the average order value was $40 last year.
So that’s more T-shirts than Chanel bags, but a mix that keeps shoppers coming back.
Over the past year, social interactions on the peer-to-peer resale platform grew 59 percent to 50.7 billion with the number of active buyers increasing 16 percent to 7.8 million.
Daily engagement on the platform is in the mid 20 minute range.
Chandra called it a “socially curated treasure hunt” that was “part T.J. Maxx, part Instagram, TikTok and part your classic thrift store.”
The company keeps 20 percent of sellers’ earnings, making what Chandra said at its core was a high margin business but one that is not making money right now.
Net losses for the first quarter narrowed to $14 million, or 18 cents a share, from losses of $74.1 million, or $1.18, a year ago. Adjusted losses before interest, taxes, depreciation and amortization totaled $4.7 million.
Revenues for the three months ended March 31 increased 13 percent to $90.9 million from $80.7 million. The platform drove gross merchandise volume of $493.4 million.
Chandra said the platform’s apparel business has been growing, particularly in special events, for instance with prom-oriented looks up 75 percent year-over-year.
Poshmark, which also sells home goods, has been busy building on its experience, bringing more buyers and sellers into the mix.
During the quarter, Poshmark launched a redesigned version of its Feed and Shop tabs, completed the rollout of its Shop by Trend option, began introducing a messaging tool to connect buyers and sellers directly and extended its Posh Ambassador program.
Poshmark in essence is a meeting place and benefits by bringing buyers and sellers together.
“The fact that we have sellers and shoppers, the fact that these sellers and shoppers have high overlap and the fact that that causes long-term retention — when you compare Poshmark to other players in the market, we’re so different,” Chandra said. “We don’t carry inventory. We absolutely have a high margin business.”
Now he just has to bring Wall Street back around.
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