Madewell’s store in Brooklyn seems like any other, with tidy racks of jeans and folded sweaters artfully laid out. But here, every product has already been worn.
Today, Madewell joins forces with ThredUp, the largest online consignment and thrift store, to debut a new retail concept called a “Circular Store” on the second floor of the brand’s existing Williamsburg location. Customers will be able to shop an assortment of pre-owned Madewell products, repair and tailor garments, and drop off old clothes. While the store is temporary, the two companies say it’s meant to help them explore how fashion brands can start selling secondhand products in-house, including in their brick-and-mortar locations.
ThredUp launched in 2009 and has become agiant in the resale industry,having processed more than 125 million used goods from 35,000 brands. It went public in March of this year, after a blockbuster 2020, in which it generated $186 million in revenue selling millions of garments. The company has built three high-tech distribution centers around the country where it processes the hundreds of thousands of items that sellers send in daily, which are photographed and priced, before being put on the ThredUp website to be sold.For the past two years, Madewell has partnered with ThredUp to sell secondhand products in-house. In 2019, Madewell started selling used jeans from thredUP in select stores, and in 2020 they began selling secondhand denim online through Madewell Forever, a resale site powered by thredUP. ThredUp sorts through Madewell products that arrive in its warehouses and curates a selection that it believes will sell well. “By now, I would say we’re in a committed long-term relationship with ThredUp,” says Liz Hershfield, senior VP and head of sustainability at the J. Crew Group, which owns Madewell. “They were just the right partner for us because they could build out something that made sense for our customer, and we could use their expertise in collecting and sorting through secondhand product, which we have no experience in.”
ThredUp makes pennies on each secondhand item it sells. But it believes it can eventually become profitable by processing an enormous volume of goods, thanks to its high-tech fulfillment centers that largely automate the sorting process. Last week, ThredUp said it will spend $77 million on its fourth flagship distribution center in Lancaster, Texas, which will open in mid 2022 and can hold 10 million items. “We want resale to be a meaningful channel for brands in the same way that off-price or wholesale is right now,” Wallace says. “Our position is that it is incumbent on us to make resale viable and profitable when incorporated into traditional retail. So whatever we can do to support retail partners in introducing more retail opportunities, we’re there for it.”
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