Aim chicks back for resale with new ThredUp deal

ThredUp Target Website

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Target is tiptoeing back into used car sales thanks to a deal with resale company ThredUp.

The major retailer confirmed on Friday that it launched a page on its ThredUp website in late March that includes listings for women’s and children’s clothing and accessories. Some merchandise is from Target’s private labels, such as children’s clothing brand Cat & Jack, or its limited-time design collaborations, such as with Lilly Pulitzer in 2015, and others are from luxury brands Target doesn’t typically stock. Everything is handled by Target from ThredUp’s inventory.

A company spokesperson said Target is in a “testing and learning” phase with ThredUp. She declined to disclose the financial terms of the deal. ThredUp also declined to comment.

This isn’t the first time Target has teamed up with ThredUp, an online consignment store. Target launched and then closed a roughly six-month test in 2015. This allowed buyers to receive Target credit for used items that ThredUp was willing to resell.

A spokesperson for Target said the company has decided to partner with ThredUp again to tap into customer interest in value and sustainability. The new Target web page on the ThredUp website is marked as a beta test. It includes about 400,000 pieces with up to 90% discount.

The partnership fits in with Target’s broader sustainability initiatives, including Target Zero, a new in-store and online label that identifies products or packaging that are reusable, reusable, or compostable. The retailer also recently converted a storefront in the San Diego area into its first zero-energy store by adding massive solar panels to the canopy.

For retailers, resale is a way to capture the attention of Gen Z and millennial shoppers who enjoy the treasure hunt and environmental aspects of frugality, says Ashley Helgans, an equity market analyst who follows the sector for Jefferies. Through second-hand shopping, she says, these young consumers can love new brands and decide to shop directly from the original retailer.

For ThredUp, closing deals with retailers is a way to expand its reach and accelerate product sales in a growing but highly fragmented industry, Helgans says. It competes with other players including The RealReal, eBay, Poshmark and Depop.

ThredUp has also entered into profit-sharing agreements with retailers such as Walmart and Madewell that list products on their websites.

Helgans said Target’s previous test may have been too early. The resale market was around $1 billion in 2015, according to Jefferies. It has now risen to around $15 billion in 2021 and is expected to more than triple to $47 billion by 2025.

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