What ThredUp’s Latest Report Says About the State of Fashion Resale
ThredUp’s resale-as-a-service (RaaS) business saw a substantial increase in clients last year, according to the company’s second annual Impact Report.
Over the course of 2022, ThredUp grew its number of RaaS clients 50 percent to 42 brands, including last year’s newcomers Tommy Hilfiger, Hot Topic and its first plus-size brand Torrid. Since January, the company has added American Eagle and its largest retail partner yet, H&M. Despite a 2.1 percent decline in RaaS revenue in the fourth quarter last year, ThredUp predicted in March that the business would see full-year revenue up 7.5 percent to 11 percent to $310 million to $320 million in 2023.
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By the end of last year, ThredUp recorded notable lifetime achievements, such as listing a total of 7.8 million items through its RaaS program and fielding 480,000 Clean Out Kits—boxes of used goods sent to ThredUp for resale—to date. According to ThredUp, its RaaS program has saved 8.4 million pounds of CO2e, 23 billion gallons of water and 16 million kWh of energy to date.
The latest window into ThredUp’s RaaS business came thanks to the company’s second annual Impact Report, released Wednesday. The 71-page document offered updates on numerous elements of the resale company’s work, particularly on the carbon emissions footprint—and savings—of secondhand fashion.
ThredUp conducted its first Life Cycle Assessment (LCA) in 2019 with Green Story Inc. Three years later, with more accurate measurements available, it conducted a second LCA to quantify the estimated carbon emissions reduction of resale. According to this latest assessment, buying and wearing secondhand clothing reduces carbon emissions by an average of 25 percent, energy usage roughly 22 percent and water usage about 31 percent.
Overall, ThredUp’s 2022 emissions grew 7 percent, however, largely due to increases in Scope 3 emissions as the company included emissions associated with aftermarket shipping for the first time. This segment accounted for 11 percent of ThredUp’s downstream transportation emissions, the company said.
Of the items ThredUp receives, 61 percent are listed on its core marketplace, 5 percent are sold in discounted “Rescues” bundles and 34 percent are sold to aftermarket channels. Of that final number, 61 percent are sold to domestic thrift stores, 20 percent are sold to domestic graders or sorters and 19 percent are sold to international brokers.
One way ThredUp has sought to reduce shipping emissions has been through package consolidation—shipping orders from multiple distribution centers together instead of individually. Due “in part” to these efforts, U.S. based shipping emissions decreased 35 percent last year, ThredUp said.
Another place the company is looking to decrease its impact is at its distribution centers. Last year, ThredUp opened a new flagship distribution center in Dallas that it claims has some of its most advanced technology, including a multi-level garment storage system that provides 25 percent higher storage density while consuming 40 percent less energy than prior iterations.
ThredUp’s Impact Report also offered insight into diversity within the company and leadership. Though Black and Latinx employees made up 58 percent of ThredUp’s total workforce, they accounted for just 3 percent of senior leadership. Minority employees made up 72 percent of the workforce and 26 percent of senior leadership. Women made up 66 percent of the workforce and 60 percent of senior leadership. The company’s Board, though it is split evenly between men and women, is 80 percent white.
