Consumers who earn shopping credits for unwanted items sent to ThredUp get inspired to fill their closets again, the resale site said.

Gap Inc. on Thursday said it has become the largest clean-out participant in ThredUp’s online platform that partners with retailers to support the circular economy, Resale-as-a-Service, which will supply bags and labels to customers of hundreds of Gap, Banana Republic, Athleta and Janie and Jack locations for sending secondhand clothes to ThredUp in exchange for shopping credits redeemable at those retailers.

Mark Breitbard, president of Gap Inc. specialty brands, said as the resale revolution continues to gain momentum, “customers are diversifying their closets, with new clothing, rental pieces and secondhand goods. [We’re] offering a sustainable and innovative way to shop for the closet of the future.”

“It’s been a home run,” ThredUp chief executive officer James Reinhart said of the clean-out bag program. “We’re helping customers clean out their closets, and on the buy side, helping retailers engage their customers.”

ThredUp has gleaned some early learnings from the test of in-store shops powered by the Resale-as-a-Service platform at 120 combined locations of Macy’s Inc. and J.C. Penney Co. Inc. Reinhart, said none of the locations have been affected by the store closures planned by the retailers.

“We did some customer intercepts at Macy’s and J.C. Penney,” said Reinhart. “One thing we learned is that customers like the idea of having a secondhand option in stores. We asked how ThredUp makes you feel about shopping at Macy’s. Overwhelmingly, the response was positive and consumers said it made them want to come back more frequently. We’re learning what types of products work best in those stores. The Macy’s customer was delighted to see Lululemon. We’re [learning] how to provide complimentary brands.”

ThredUp is improving the experience for customers on its e-commerce site by making sure the assortment is seasonally appropriate, and there’s the issue of making the return of unwanted purchases easier. “We haven’t bitten off any new returns piece. We talk about it,” he said, praising Happy Returns, a company that helps online shoppers, whom Happy says prefer making returns in person, avoid the hassles of waiting in lines at stores or packing and mailing back unwanted products.

Reinhart hopes to grow cobranded apparel programs similar to its recent Madewell partnership. “Madewell came to us and said, ‘Our customer wants to buy secondhand, so we’ve been collecting [jeans] for them,” he said of the Madewell Archive collection, which is cobranded with ThredUp. “I hope this is a recipe for other partners in the future. It demonstrates the opportunity for new and used to work together. We’re in various stages of conversation with a lot of brands.”

ThredUp is active in the luxury arena, albeit not to the extent of luxury resale e-commerce sites such as The RealReal or Vestiaire Collective, but Reinhart is eyeing future growth at the high end. “Consumers like fresh, new things. My hope over the next 25 years is that consumers move upmarket and that more high-quality products are made from more sustainable materials. Consumers are willing to spend 10 percent more on sustainable products. I would love to see a trend where they’re buying those products and we’re able to resell them.”

Chris Ventry, vice president of the retail practice at SSA & Company, said if department stores such as Bloomingdale’s and Saks Fifth Avenue introduced consumers to resale, their clients might be more inclined to pay full price for luxury products, knowing they could sell items when they no longer wanted, effectively reducing the cost of new styles.

And like The RealReal and others, ThredUp wants to align itself with luxury brands, which are seen as launching their own resale operations at some point. “It’s only a matter of time before somebody decides to take it on. We hope that we’re a resource for those brands. There’s enough opportunity for us to work together.”

ThredUp was recently cited by Wells Fargo in a report on the resale market, earning the moniker of “number-one player in the space” from the financial services company, igniting rumors that an initial public offering may be on the horizon. The company, with an estimated $250 million in gross merchandise value, is said to be growing at a 40 to 50 percent clip, and ThredUp’s most recent capital raise in August brought its total to more than $300 million.

“If you’re a public company or owned by investors, we’ve heard increasingly from ESG [environmental, social and governance] investors, that they really want to own companies that are doing good. Investors are increasingly caring about this,” Reinhart said.

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