Why fashion resale isn’t working

 In Fashion, Retail

Fashion has a sustainability problem. Fashion resale — one way brands aim to address sustainability concerns, by taking back past-season items and reselling them — has a profit problem. Resale programs generate, at most, 5% of a brand’s revenue, Bloomberg reports. Fast fashion retailer Shein, which has little room to lower prices on used merchandise, doesn’t expect its resale business to ever be profitable. Luxury outerwear maker Arc’teryx did see its resale revenue double last year — but environmental impact relies on scale. As one expert notes, “helping rich people buy and resell parkas and handbags is not the answer.”


  • Outdoor retailer Patagonia, an industry leader on sustainability with a longstanding resale program, made just 1% of its revenue from secondhand sales in 2021.
  • Allbirds, which makes sneakers with a lower environmental impact, says a resale program launched in February 2022 has generated twice as much in gross sales than was expected.


By Melissa Cantor, Editor at LinkedIn News

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The Problem With Fashion’s Sustainability Push: It Doesn’t Make Much Money

More than 100 apparel retailers introduced resale platforms within the past two years. But consumer acceptance has so far been minimal.

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Illustration: Qianhui Yu for Bloomberg Businessweek

Resale has quickly emerged as the initiative of choice for fashion brands looking to lower their carbon, plastic and water footprints—or at least in some instances to convince green-conscious shoppers that they’re trying. But here’s the rub: So far even savvy brands such as Patagonia or Shein haven’t figured out how to make secondhand selling account for more than a tiny fraction of their profits.

More than 100 apparel retailers have started in-house resale platforms within the past two years, with 88 new programs last year alone, according to data from ThredUp Inc., which both operates an online thrift store business and has helped many brands set up their own resale programs. This includes some of the biggest brands, including H&M and fast-fashion champ Shein. In 2022 resale of apparel, footwear and handbags in the US was a $28.1 billion market, with potential for double-digit year-over-year growth in 2023 and 2024, according to predictions from Coresight Research.

Resale Revenue

Share of the overall US fashion market

Source: Coresight Research

The efforts have been in part motivated by brands’ desire to control and make money on the resale of their own goods, following the rise of peer-to-peer secondhand websites such as Poshmark and The RealReal. Brands are also using their resale platforms to sell damaged inventory or returns that come back with imperfections.

Sustainability is also a big reason. The United Nations Environment Program estimates that the fashion industry accounts for 2% to 8% of global carbon emissions. And environmentalists have knocked many apparel makers for cranking out garments that quickly end up in landfills. Secondhand business models allow retailers to continue to make money while not having to produce as many new garments, avoiding some of the high carbon emissions associated with energy use, materials and transportation.

At least that’s how it’s supposed to work. In reality, resale programs aren’t generating significant revenue or offsetting enough production of new clothing to move the needle much. Trove, Archive and other clothing resale program operators say their brand clients have a goal of secondhand being 10% or more of their overall revenue in the coming years. But secondhand clothing accounts for only as much as 5% of overall revenue for brands that have invested the most time and marketing in their programs—and almost no revenue for programs that do little marketing, according to companies including Archive, Recurate and Trove, which provide resale services. Patagonia Inc., which has a long-running and reputable resale program called Worn Wear, generated less than 1% of its total revenue from the program in 2021, the latest year for which data are available. Womenswear maker Eileen Fisher Inc., which started doing resale in 2009, said it’s collected 2 million products via the take-back scheme, accounting for only 5.4% of all the new garments the company has produced since the company started 39 years ago.


Few brands have been trumpeting the programs’ success. Of the 16 North American apparel and footwear companies with active resale programs that Bloomberg reached out to—including Abercrombie & Fitch, Patagonia, Urban Outfitters and Tommy Hilfiger owner PVH Corp.—five declined to provide data or details on how their secondhand programs are performing. Another five didn’t respond to requests for comment.

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At a garment factory in Guangzhou, China. Photographer: Jade Gao/Getty Images

For Shein, whose inexpensive garments have drawn criticism for encouraging the growth of disposable fashion, profitability was never the goal. “We did not launch resale with the intention of turning a profit, but rather to create awareness and easy accessibility to our customers to engage in the circular economy,” Caitrin Watson, Shein’s director of sustainability, wrote in an email.

“Right now, brands, boards and executives see the only way to grow their business in apparel is to sell more items, which happens by making more items, which produces more CO₂,” says Andy Ruben, executive chairman at Trove, the company that operates the resale programs at Levi’s, Lululemon and Patagonia, among others. “Resale has to build your business. Otherwise it won’t ever scale and achieve the sustainability goals we want.”

Ruben says Trove’s clients get 1% to 5% of their overall revenue from resale. “Right now we’re still building for a future that’s not here yet.”

Getting resale to a place where it’s both bringing in solid sales and slowing production of new goods will require more consumer awareness, deeper involvement from company leadership and improved logistics infrastructure. Although most consumers know they can buy secondhand from a peer-to-peer website or app such as Poshmark, “very few customers think to go directly to the website [of a brand] to buy secondhand, because that didn’t exist,” says Adam Siegel, co-founder and chief executive officer of Recurate Inc.

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An H&M store in Chicago in 2005. Photographer: Tim Boyle/Getty Images

Used items are also listed separately from new ones on brands’ websites. To get resale to the next stage of growth, retailers need to be comfortable listing used and new items together to “remove the hurdles” to buying secondhand, says Gayle Tait, Trove’s CEO.

Getting buy-in from corporate executives who have little financial or regulatory incentive to adopt resale is another obstacle. Some are afraid of secondhand products cannibalizing sales of new fashion, and others expect the resale model to work on its own without additional investment in marketing and strategy, says Cynthia Power, founder of resale consulting company Molte Volte.


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