A silver lining of tariffs: Soaring secondhand apparel sales

The White House’s tariff seesaw is disrupting global supply chains and planning for many businesses. However, it’s also benefiting companies that don’t manufacture overseas, or at all. Tariffs are poised to boost the market for secondhand apparel, which is booming for the second year in a row, according to ThredUp’s annual Resale Report.

Amid the uncertainty over tariffs, most apparel executives are navigating procurement disruptions and eyeing resale as a steady source of goods, while a majority of consumers plan to increase their secondhand shopping, the March 18 report found in recent surveys. In addition, the secondhand fashion market is seeing the strongest growth since 2021.

“You compare it to how retail is struggling to grow, and then you add on the tariffs and the uncertainty of these supply chains that all these retailers are dealing with, and it’s almost flipping that story on its head,” said ThredUp’s Chief Strategy Officer and General Counsel Alon Rotem. “Resale is actually in the strongest position it’s ever been in right now.”

Not only is the resale market insulated from global supply chain shocks, it may benefit from them, Rotem noted. And if retailers pass costs onto consumers, secondhand offers a less expensive entry into premium brands, such as Vuori, Lululemon and Reformation, which sell well secondhand.

‘Stable and predictable’ secondhand

Since returning to office Jan. 20, President Donald Trump has layered 20 percent tariffs onto goods from China, the world’s largest fashion exporter. That came atop existing tariffs of up to 25 percent.

Fast fashion giants, such as Shein and Temu, have been bracing for Washington to act on its promise close the de minimis loophole on imports under $800. Although that exemption remains for now, tariffs are already reshaping the apparel market, according to ThredUp’s surveys in January and February of 3,034 American consumers and 50 retailers and brands.

Among retail and brand executives in apparel, ThredUp found:

• Eighty percent expect the trade wars to disrupt their supply chains.
• Fifty-four percent saw resale as a “stable and predictable source of clothing” as tariffs potentially change.
• Forty-four percent of execs reported seeking ways to user fewer imports.
• Seventy-six percent of those not involved in branded resale already are looking to get involved.

The overall retail market offers clues that the recent tariffs may be dampening longer-term growth. Tariffs pushed U.S. retail spending to drop from January to February, according to the National Retail Federation. However, sales overall rose by 4.4 percent overall in the year’s first two months, compared with the same period in 2024.

Steve Preston, president and CEO of Goodwill Industries International in Rockville, Maryland, in February said he is closely eyeing the trade policies before determining benefits or drawbacks for the nonprofit. “It’s very hard to call right now, because we don’t know where it’s going to end up,” he told Trellis. “Now there is no doubt that if clothing or other goods go up, if prices go up, our value proposition will be greater. There’s no doubt about that.”

Apparel shoppers are highly motivated to find pre-worn bargains if prices soar, according to ThredUp:

• Sixty-two percent of Americans worry that tariffs will drive up prices for fashion.
• Fifty-nine percent of consumers said they will seek secondhand items and other less-expensive options if apparel prices rise.
• That was even more true for millennials, at 69 percent.
• Among younger adults, 48 percent reported that they already shop for resale before new apparel. That’s up by 7 percent from 2022.

Secondhand growth was already aggressive during the administration of President Joe Biden, ThredUp’s resale report found:

• The value of sales of used apparel grew 14 percent in 2024, which is five times faster than retail overall. The market will grow by 9 percent each year to reach $74 billion in 2029.
• Online sales of preworn clothes and shoes made up 88 percent of resale spending and grew eight times faster than apparel retail overall.
• Globally, secondhand rose by 15 percent in 2024, and it will rise by 10 percent annually to reach $367 billion by 2029.

Ups and downs for resellers

ThredUp, based in Oakland, California, sells thousands of women’s and children’s apparel brands on its platform. The public company has struggled with profitability in its 16 years. On March 3 it reported revenues of $260 million, with growth of 1 percent for 2024 over 2023. Its stock was trading at $2.22 on March 18, a fraction of its peak of $27.27 in June 2021.

Nevertheless, the business insists on a bright future for resale. “It’s as profitable as it’s ever been, and it has a credible growth path as well,” Rotem said. “And so we’re really bullish on the future.” He noted, for example, that resale startup Vinted, based in Vilnius, Lithuania, is turning profits. And San Francisco’s The RealReal has reported strong earnings in recent quarters.

Eighty-six percent of retail executives told ThredUp that customer desire for used apparel has either grown or stayed steady in the past three years, according to ThredUp’s report.

Retailers and brands should seize the moment to take a fresh look at resale beyond clothes and shoes, according to Rotem. For instance, marketplaces are thriving, formally and otherwise, for used furniture, baby gear, electronics and sporting goods.

Even as the volatile policy environment leaves many short-term questions unanswered for apparel businesses, Rotem advised other corporate sustainability executives to hold tight to their long-term goals.

An era is ending of broader federal support for corporate sustainability to be baked into rules, regulations and policies. However, the pendulum is likely to swing in another direction at some point, according to Rotem. “Just because it doesn’t matter so much to the government doesn’t mean those things still don’t matter to consumers,” he said of corporate adherence to sustainability and human rights principles. “It’s just more incumbent on the brands to make sure that consumers are aware of these things and can differentiate their choices.”

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