Preview: Apparel shortages to drive bumper holiday sales for secondhand retailers

Realreal

08/11/2021 15:01

By Uday Sampath Kumar
    Nov 8 (Reuters) - Newly listed secondhand apparel retailers
ThredUp and Poshmark are expected to forecast strong end-of-year
sales as a shortage of new clothing at stores pushes shoppers to
consider thrifting as an option to fill their holiday shopping
bags.
    Apparel had the highest online out-of-stock levels among
U.S. retail sectors in the run-up to the holiday season, Adobe
Analytics said in October.  urn:newsml:reuters.com:*:nL4N2RE2TA
    Those shortages are expected to drive more people to
secondhand clothing companies such as Poshmark Inc  POSH.O ,
ThredUp Inc  TDUP.O  and ReaReal  REAL.O , which are not as
affected by global supply chain issues as they get their stock
mainly from the closets of American households.  
    "Inventory is scarce right now. Consumers are going to shop
where they find inventory to make sure they have things in time
for the holidays," said Jessica Ramirez, retail analyst at Jane
Hali & Associates.

THE CONTEXT
    Secondhand retailers have seen a blistering pace of growth
over the last few years as eco-conscious Gen Z and millennial
consumers increasingly find it fashionable to buy used products
and cut back on their environmental footprint.  urn:newsml:reuters.com:*:nL4N2QT32C
   
    The size of the market is only expected to get bigger. More
than a third of shoppers say they are likely to buy second-hand
apparel this holiday season, with that number rising to 50% for
people under the age of 40, according to a survey of U.S.
shoppers conducted by Accenture.
    
THE FUNDAMENTALS
* Holiday-quarter sales are expected to rise 22.9% for Poshmark
and 53.3% for RealReal, according to IBES data from Refinitiv
* For the reporting quarter, Poshmark is expected to report
revenue of $82.7 million, while RealReal is expected to report
$113.3 million and ThredUp $61.8 million 
    
* All three companies are expected to report losses on a per
share basis
 
WALL STREET SENTIMENT
* Poshmark has an average price target of $43, ThredUp $28.50
and RealReal $22
* All three stocks have an average "buy" rating on Wall Street
       

    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Sales of major U.S. secondhand apparel retailers    https://tmsnrt.rs/30941eD
Sales of major U.S. secondhand apparel retailers    https://tmsnrt.rs/3bQfoKD
Thrifting boom    https://tmsnrt.rs/3CkAdJL
Thrifting boom    https://tmsnrt.rs/3mjq1fd
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
 (Reporting by Uday Sampath in Bengaluru; Editing by Anil
D'Silva)
 ((UdaySampath.Kumar@thomsonreuters.com; within U.S.+1 646 223
8780; Twitter: https://twitter.com/sampath_uday  ;))