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thredUP had its best quarter ever to close out 2021.
The resale platform's quarterly earnings call revealed this on a few levels this week:
- The company posted $72.9 million in revenue for the fourth quarter, leading to 68% year-over-year growth, which was its best ever.
- The number of active buyers and orders on the platform were also a record. Each came in at 1.7 million during the quarter, according to earnings reported by the company this week.
- For the full year it grew 35% with revenue of $251.8 million. Total annual orders were also a record, with 5.3 miliion.
thredUP's platform facilitates sales of second-hand apparel, shoes and accessories. It also forges resale partnerships with brands, most recently working with adidas, Crocs, and Michael Stars on its "resale-as-a-service" initiative. Based in Oakland, the company sought to expand internationally in 2021 through the acquisition of European fashion resale platform Remix. That company opened a new facility in Europe.
“We ended our first year as a public company with another quarter of strong financial performance,” said James Reinhart, CEO of thredUP, in a statement. “In 2022, we expect our continued investment in our infrastructure both domestically and internationally will enable us to keep building the foundation for the future of resale on the internet.”
The momentum for thredUP comes at a time of growth in digitally-powered resale. The growth of ecommerce has led to more comfort with shopping online, making shoppers more willing to engage in thrift and consignment purchases over the internet. At the same time, rising consumer awareness about the environmental challenges that result from the influx of consumer goods has led to increased interest in extending a product's life. Propelling this market, thredUP is building a new kind of supply chain in the resale space.
“The not-so-secret but, I think, often misunderstood economic engine that underlies our model is that most of our clothing is listed on consignment,” Reinhart told analysts following the earnings report. “This means we have little inventory risk. Our strategy has been developed with a deeply calculated approach about what it takes to build and sustain competitive advantage over time. We believe that every day, our supply advantage increases, our infrastructure moat widens, and the network effects of our marketplace grow.”
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Labor disputes on the West Coast could cause further disruption heading into peak season.
When the first half of 2023 is complete, imports are expected to dip 22% below last year.
That’s according to new data from the Global Port Tracker, which is compiled monthly by the National Retail Federation and Hackett Associates.
The decline has been building over the entire year, as imports dipped in the winter. With the spring, volume started to rebound. In April, the major ports handled 1.78 million Twenty-Foot Equivalent Units. That was an increase of 9.6% from March. Still it was a decline of 21.3% year over year – reflecting the record cargo hauled in over the spike in consumer demand of 2021 and the inventory glut 2022.
In 2023, consumer spending is remaining resilient with in a strong job market, despite the collision of inflation and interest rates. The economy remains different from pre-pandemic days, but shipping volumes are beginning to once again resemble the time before COVID-19.
“Economists and shipping lines increasingly wonder why the decline in container import demand is so much at odds with continuous growth in consumer demand,” said Hackett Associates Founder Ben Hackett, in a statement. “Import container shipments have returned the pre-pandemic levels seen in 2019 and appear likely to stay there for a while.”
Retailers and logistics professionals alike are looking to the second half of the year for a potential upswing. Peak shipping season occurs in the summer, which is in preparation for peak shopping season over the holidays.
Yet disruption could occur on the West Coast if labor issues can’t be settled. This week, ports from Los Angeles to Seattle reported closures and slowdowns as ongoing union disputes boil over, CNBC reported. NRF called on the Biden administration to intervene.
“Cargo volume is lower than last year but retailers are entering the busiest shipping season of the year bringing in holiday merchandise. The last thing retailers and other shippers need is ongoing disruption at the ports,” aid NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said. “If labor and management can’t reach agreement and operate smoothly and efficiently, retailers will have no choice but to continue to take their cargo to East Coast and Gulf Coast gateways. We continue to urge the administration to step in and help the parties reach an agreement and end the disruptions so operations can return to normal. We’ve had enough unavoidable supply chain issues the past two years. This is not the time for one that can be avoided.”