A shortage of clothing to boost holiday sales for second-hand retailers according to Reuters

Author: Uday Sampath Kumar

(Reuters) – Newly listed ThredUp and Poshmark clothing retailers expect strong year-end sales, as the lack of new clothing in stores is prompting shoppers to consider holiday shopping bags as an option.

Clothing had the highest level of online stock depletion among U.S. retail sectors for the holiday season, Adobe (NASDAQ 🙂 Analytics said in October.

These shortages are expected to lead to second-hand clothing companies such as Poshmark Inc, ThredUp Inc and ReaReal, as global supply chain problems do not affect this as their stocks are mainly sourced from American home closets.

“Inventory is scarce right now. Consumers will go shopping where they find inventory to make sure they have things on vacation in time,” said Jessica Ramirez, a retail analyst at Jane Hali & Associates.

CONTEXT

Second-hand retailers have seen tremendous growth in recent years as eco-conscious Z Gen and millennial consumers find it increasingly fashionable to buy used products and reduce their environmental footprint.

(GRAPHIC: Thrifting boom – https://graphics.reuters.com/USA-RETAIL/egvbkmgexpq/chart.png)

It is only expected to increase the size of the market. More than a third of shoppers said they are likely to buy second-hand clothing this holiday season, and that number will rise to 50 percent for those under 40, according to a survey of U.S. buyers by Accenture (NYSE :).

BASICS

* Quarterly holiday sales are expected to rise 22.9% for Poshmark and 53.3% for RealReal (NASDAQ :), according to Refinitiv IBES data.

* For the quarter of the report, Poshmark is expected to provide $ 82.7 million in revenue, while RealReal is expected to provide $ 113.3 million and ThredUp 61.8 million.

(GRAPH: Sales of large second-hand clothing stores in the US – https://graphics.reuters.com/POSHMARK-RESULTS/zdvxonrgjpx/chart.png)

* All three companies are expected to report losses per share

WALL STREET FEEL

* Poshmark has an average price of $ 43, ThredUp $ 28.50 and RealReal $ 22

* All three shares have an average “buy” rating on Wall Street