Remix, which was one of Europe's leading fashion resale companies, was acquired by ThredUp as part of its international expansion strategy. The acquisition was intended to expedite ThredUp's growth plans in the region.
However, during its second quarter earnings call for 2024, ThredUp revealed its intention to exit the European market and began exploring strategic alternatives for Remix. Last year, the business generated net revenues of $63.5m and a gross margin of 24.2%.
According to ThredUp, the separation is designed to allow each entity to focus on their respective markets and capitalise on their distinct capabilities. ThredUp will focus on its domestic core US operations.
As part of the Remix sale, a management buyout was led by the unit's general manager Florin Filote.
Following the transaction, ThredUp will retain a minority interest in Remix, which also benefited from a pre-transaction cash injection of $2m from ThredUp to bolster its capital raising activities.
ThredUp plans to provide additional details regarding the transaction, including unaudited pro forma financial statements, in a forthcoming filing with the US Securities and Exchange Commission.
ThredUp co-founder and CEO James Reinhart said: “This is a mutually beneficial outcome for both ThredUp and Remix. We are confident that Remix will thrive under Florin Filote’s leadership and the team’s expertise. This transaction will allow ThredUp to focus on our core US business and continue to innovate and evolve our marketplace.”
Filote shared his enthusiasm for leading Remix independently, highlighting the company's solid foundation and dedication to delivering an exceptional resale experience within Europe.
He said: “We are excited to embark on this new chapter as an independent company. We have a strong foundation and a talented team, and we are committed to continuing to provide our customers with a best-in-class resale experience. We believe that this transaction will enable us to accelerate our growth and expand our presence in the European market.”
ThredUp is recognised as one of the largest online resale platforms for clothing, footwear, and accessories, having processed over 200m items from 60,000 brands spanning 100 categories.
In the third quarter of fiscal year 2024 released last month, ThredUp reported a net loss of $24.8m or -33.9% of total revenue for the quarter. This figure included a $9.8m impairment charge on long-term assets associated with its European operations.
In the US, the company had 1.248m active buyers and 1.172m orders, reflecting a 7% and 10% decrease, respectively, compared to the third quarter of 2023.
For the full fiscal year 2024, ThredUp anticipates total revenue in the range of $300m to $302m and gross margin in the range of 70.8% to 71.0%. Total revenue in the US is projected to be between $250.8m and $252.8m.
Alice Price, analyst at GlobalData notes: “ThredUp’s decision to divest Europe secondhand marketplace Remix, comes as the resale market is becoming increasingly saturated, with smaller players unable to compete with low-cost, convenient rival Vinted, which continues to dominate the market in Europe. The resale market continues to grapple with a profitability issue, further cementing ThredUp’s decision to divest. While it will also enable ThredUp to focus on its US business, where it is one of the largest players in the region.”
In its third annual Impact Report for 2023, the company shared that it has successfully extended the life cycle of 200m garments as part of its effort to promote a circular economy .
"ThredUp exits Europe with Remix sale to focus on core US market " was originally created and published by Just Style , a GlobalData owned brand.
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