By
Bloomberg
Printed
April 6, 2025
ThredUp Inc. Chief Government Officer James Reinhart gave a colleague a excessive 5 shortly after President Donald Trump’s overhaul of US commerce coverage earlier this week—a response very totally different from these of different consumer-company executives hammered by the announcement.
ThredUp CEO James Reinhart. – Nate Fong Images
The impetus was the Trump administration’s ending of a loophole that has boosted fast-fashion corporations in China and Hong Kong. The loophole allowed corporations like Shein and Temu to ship small packages with out import duties.
When the ‘de minimis’ exemption concludes on Could 2, the price of attire bought by Shein and its friends will rise, making merchandise from resale retailers ThredUp and RealReal Inc. doubtlessly extra aggressive. Low cost retailers resembling TJX Cos. and Ross Shops Inc. additionally stand to profit.
It’s a uncommon second of optimism for resale companies, which have been pummeled lately as profitability and efficiency have missed expectations.
“This is a great time to prove that they can accelerate growth and drive profitability,” stated Poonam Goyal, a Bloomberg Intelligence analyst. “This is their time to shine.”
ThredUp has gained barely since Trump’s announcement on Wednesday versus steep declines for a lot of the attire business. The corporate’s inventory has dropped greater than 80% because it went public in 2021.
ThredUp Inc – Reuters
ThredUp sells resale objects, together with sweatshirts, purses, and sneakers, with a mean price ticket between $20 and $25. Shein and Temu promote many merchandise in an identical vary, in addition to lower-cost objects, though their merchandise is primarily new.
Executives at Thredup have lobbied in opposition to the ‘de minimis’ loophole for years. In an announcement this week, the corporate stated, “We believe that making fast fashion more expensive will incentivize consumers to choose quality, durability, and secondhand options.”
After giving his colleague a excessive 5, “I said ‘let’s go,’” Reinhart stated in an interview. “Let’s go make a statement about why we’re pleased to see this finally come to fruition.”
Trump’s tariffs on China, Vietnam, Cambodia, and different nations the place a lot US-bound attire is produced could give corporations like ThredUp, RealReal, and Poshmark Inc., a web based market for used items owned by South Korean web firm Naver Corp, an extra edge.
“Our supply chain is domestic,” Reinhart stated. “Potentially, it allows us to be an outlier around performance over the next few quarters.”
He added that the surge in demand for reasonable objects from Shein and different opponents, which “helped crowd out some of the resale opportunity,” will doubtlessly be reversed.
TJX, which operates the TJ Maxx and Marshalls chains, can be effectively positioned because it buys extra stock from different retailers within the US fairly than sourcing them from overseas. It has one other benefit in that its retail chains promote new garments—a a lot greater market than used attire.
“Tariffs are likely to create significant disruption in the market, greatly increasing the availability of products to off-pricers at attractive prices,” Citi analyst Paul Lejuez wrote in a observe to purchasers on Thursday. “A potentially weakening consumer environment will mean more consumers are likely to trade down to the off-price channel in search of value.”
