The apparel market represents the largest category in the e-commerce industry. And resale happens to be the fastest-growing segment of the apparel market. ThredUp (NASDAQ:TDUP) has created one of the world’s largest resale platforms for women’s and kids’ clothing.
After going public earlier this year, the stock price sits 36% below its all-time high. In this Backstage Pass video, which aired Oct. 27, 2021, Motley Fool contributor Rachel Warren shares her thoughts on ThredUp, explaining why investors should keep this fashion reseller on their radar.
Rachel Warren: Well, one company I thought of that recently went public and that is ThredUp. It’s a unique play in the e-commerce space, which is a space that I write about pretty frequently. ThredUp is basically an online consignment store. You can buy and sell used clothes on the platform.
The stock went public earlier this year in March, and shares with the company are only trading up about seven percent since that time. It really hasn’t been a high performer by any means. But I do think it is an interesting company to watch if you’re looking at e-commerce and you want to look at maybe an early growth player and also a company that carves this unique area out for itself within the broader e-commerce space; ThredUp actually conducted a study not long ago and found that the secondhand clothing market is projected to double in the next five years, reaching total sales of $77 billion.
There is a really vast market opportunity there for ThredUp and the company grew its revenue 27% year-over-year in the most recent quarter, and gross profits were up 34% year-over-year. Again, not a company that’s delivered very strong or robust gains, but it’s definitely one I think that it’s worth watching.
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