US thrift shops are betting that the ache typical retailers are anticipated to endure from Donald Trump’s tariffs will likely be their acquire.
Many giant retailers are bracing themselves for turbulent instances because the US president’s levies sharply enhance the price of importing items, a few of which can nearly definitely be handed on to shoppers. However second-hand sellers are hoping that prospects will flock to their shops searching for bargains.
“Resale is a rare industry that benefits from the administration’s global tariffs,” mentioned Alon Rotem, chief technique officer at on-line consignment and thrift retailer ThredUp. “Everything we sell comes from the closets of Americans, so everything we sell is immune.”
Shares of ThredUp and Savers Worth Village — the 2 largest publicly traded thrift shops within the US — have climbed 31 per cent and 22 per cent, respectively, since Trump introduced his “liberation day” tariffs on April 2. The S&P retail choose index is down 7 per cent in that point, based on FactSet information.
Even after Trump introduced a 90-day pause on his “reciprocal tariffs”, the remaining 10 per cent blanket levy on most imports — in addition to a mixed 145 per cent obligation on items from China — is anticipated to boost shopper costs by 2.9 per cent, costing the typical family $4,700 a 12 months, based on the Yale Funds Lab.
Analysts warned that prices for clothes and toys, specifically, may enhance sharply within the coming months as a result of US style and merchandise business’s heavy reliance on imports from China.
Resale, nevertheless, permits corporations to “sidestep tariffs,” mentioned Simeon Siegel, a retail analyst at BMO Capital Markets. He added that the second-hand market, already well-liked amongst youthful shoppers, can be “doubly attractive” within the occasion of a recession, as extra potential patrons start to hunt for reductions.
“If tariffs meaningfully affect the availability or price of certain goods like apparel, cars and electronics, we expect to see buyer activity spike in those categories,” mentioned Ken Murphy, chief innovation officer at OfferUp, a peer-to-peer on-line resale market.
Adele Meyer, government director of NARTS: The Affiliation of Resale Professionals, a commerce group, mentioned she was “cautiously optimistic” that tariffs would increase the second-hand business as a result of resale “always flourishes during any kind of economic downturn”.
However some analysts warned that second-hand sellers weren’t essentially resistant to a provide shock, even when their items got here from throughout the US. In a local weather of elevated uncertainty and rising fears of unemployment, shoppers may resolve to purchase much less within the first place, or choose to carry on to their current gadgets for longer, leaving resellers with a smaller pool — and probably worse high quality — of stock.
“You have to fill up these resale suppliers with items that people buy at regular stores,” mentioned Shawn Carter, an affiliate professor on the Style Institute of Expertise. “That’s why the best environment for resale is also the best environment for regular sale.”
OfferUp’s Murphy insisted, nevertheless, that folks have been extra prone to complement their revenue by “turning unused items into cash” in an financial downturn. He mentioned that demand, not provide, was the important thing variable for many resale platforms however shrugged off fears of a shopper pullback within the US, including that OfferUp had traditionally “seen demand grow when supply chains are affected”.
However Savers Worth Village, which operates for-profit thrift shops throughout North America and Australia, was much less bullish on demand exterior of the US. Mark Walsh, the chain’s chief government, warned in an earnings name in February that “the tariff issue certainly clouds the picture” for demand in Canada, which makes up greater than a 3rd of its revenues.
However, Trump’s aggressive financial insurance policies might be “a shot in the arm for what was already growing momentum” throughout the US resale market, based on Dylan Carden, an analyst at William Blair.
The US second-hand market was price an estimated $50bn in 2024, up 30 per cent from 2023, based on figures compiled by Capital One.
The market’s progress has been pushed primarily by a decline within the stigma hooked up to purchasing used items, notably amongst sustainability-conscious younger folks, fairly than worth dynamics, mentioned Carden. He famous, nevertheless, that renewed inflationary pressures may broaden the acceptance of second-hand clothes and entice older and wealthier shoppers to the market.
A bounce in inflation expectations may additionally allow resellers to extend costs, even when their very own provide prices have been unaffected, he added, though pricing energy could also be extra restricted within the occasion of a recession.
ThredUp chief government James Reinhart mentioned in an earnings name in March that rising costs for brand new items, notably from Chinese language ecommerce teams Temu and Shein, may present “some modest tailwind” resale items.
