The booming second-hand clothing market, valued at billions, is facing a paradox: despite its popularity, most companies are struggling to turn a profit. In the UK, 67% of millennials shop second-hand, and Gen Z now has 40% pre-owned items in their wardrobes. Yet from local charity shops to online giants, profitability remains elusive.
Major players like ThredUp and The RealReal are not profitable, dragging share prices below their IPOs. Vinted posted a pre-tax loss of €47.1m in 2022, while Depop lost £59m in 2023. Even luxury reseller Vestiaire only hopes to break even by year-end. The problem is economic: ultra-fast fashion floods the market with low-quality clothes, overwhelming resellers.
A 2023 study found a large Swedish charity must incinerate 70% of donated clothing due to poor quality. In Ghana, a major recipient of European second-hand clothes, 40% of imported bales become waste. “There’s an oversupply of clothes, lowering the perceived and real value of everything,” says Liz Ricketts of The Or Foundation.
Processing second-hand goods is labour-intensive and costly. “Reuse requires a human touch to assess each item,” Ricketts notes. To cope, some companies are changing models: ThredUp now charges consumers and brands to process old clothing, while others seek alternative revenue streams.
