Some of us may have gotten used to wearing sweatpants in our home offices.
But the fashion industry isn’t dead just yet.
I’ve already noted that high fashion turned in a wildly successful 2020. Though, there’s another corner of the fashion world that is thriving as well.
And in just a week’s time, the industry leader is hitting the market.
Poshmark Inc. (NASDAQ: POSH) is a secondhand clothing and apparel online marketplace.
That’s right; it doesn’t have any stores. It doesn’t make and sell any clothing. And it doesn’t host fashion shows. But it is the hot thing in fashion nonetheless.
The idea is simple enough: rather than donating or throwing away clothes, why not find someone who actually wants it? Sell it to them instead, and make a buck or two.
That’s actually just a fraction of the opportunity here. There’s a huge boom in secondhand clothing. And it’s being driven by those just now coming into money.
Ten years ago, you might have thought of thrift stores as not much of an opportunity. That’s changed.
Thrifting and vintage clothes shopping have skyrocketed as younger fashionistas look for sustainable fashion.
This is a new segment of the market. There’s traditional thrift and then there’s the resale market. Already it is becoming just as big as the other hotspot in apparel: fast fashion.
Fast fashion is a trend that took off through Instagram, as companies like H&M have been able to speed up production of new looks. It is also extremely wasteful.
The environmental movement has started to hit the fashion industry hard. Now, it’s much more fashionable to feature vintage clothes than something off a rack. And this is only going to grow in the next few years:
But of course, the death of retail is also a major player in this story.
With fewer and fewer options, fashion-conscious people have had to turn online. And sometimes Amazon just isn’t the right option.
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The fashion world is changing. And the numbers back up this new player.
Poshmark is the clear leader in this resale trend. It has 31.7 million active users and more than 200 million items on its marketplace.
It claims a sale every second on its platform. And it profits by taking a cut from each one.
The company’s marketplace has been even more popular over the last year, as stores closed and ecommerce grew.
As the established marketplace for this unique corner of fashion, it has been able to appeal to users of all ages and income brackets. From those pinching their pennies throughout 2020 to those missing window shopping, Poshmark attracted them all.
Its numbers prove it.
In just the first nine months of 2020, it grew its top line by 28%. That growth led to its first-ever net profit for any period.
And it couldn’t have picked a better time to go into the black.
The company announced last month that it intends to go public via an IPO. That IPO is set for next week.
Poshmark is expected to rake in around a quarter billion in fresh capital. And that money comes at the best possible time.
So far, the company has focused on just the U.S. and Canadian markets. This infusion of capital will help it expand even further.
The possibilities in Europe and Asia could be even larger.
Right out of the gate, this new stock should head higher. And it’s certainly one to keep an eye on as trading begins a week from today.
To your prosperity and health,
Joshua M. Belanger