AP – Stores selling secondhand clothes, shoes and accessories are poised to benefit from United States (US) President Donald Trump’s trade war even as businesses the world over race to avert potential damage, according to industry experts.
American styles carry international influence, but nearly all of the clothing sold domestically is made elsewhere. The Yale University Budget Lab last week estimated short-term consumer price increases of 65 per cent for clothes and 87 per cent for leather goods, noting US tariffs “disproportionately affect” those goods.
Such price hikes may drive cost-conscious shoppers to online resale sites, consignment boutiques and thrift stores in search of bargains or a way to turn their wardrobes into cash.
Used items cost less than their new equivalents and only would be subject to tariffs if they come from outside the country.
“I think resale is going to grow in a market that is declining,” said apparel industry analyst Kristen Classi-Zummo at market research firm Circana. “What I think is going to continue to win in this chaotic environment are channels that bring value.”
The outlook for preowned fashion nevertheless comes with unknowns, including whether the president’s tariffs will stay long enough to pinch consumers and change their behaviour.
It’s also unclear whether secondhand purveyors will increase their own prices, either to mirror the overall market or in response to shopper demand.
A NEW AUDIENCE COURTESY OF STICKER SHOCK
A retired fashion executive, Jan Genovese, sells her unwanted designer clothes through customer-to-customer marketplaces like Mercari. If tariffs cause retail prices to rise, she would consider high-end secondhand sites.
“Until I see it and really have that sticker shock, I can’t say exclusively that I’ll be pushed into another direction,” Genovese, 75, said. “I think that the tariff part of it is that you definitely rethink things. And maybe I will start looking at alternative venues.”
The secondhand clothing market already was flourishing before the specter of tariffs bedeviled the US fashion industry. Management consulting firm McKinsey and Co predicted after the COVID-19 pandemic that global revenue from preowned fashion would grow 11 times faster than retail apparel sales by this year as shoppers looked to save money or spend it in a more environmentally conscious way.
While millennials and members of Generation Z were known as the primary buyers of used clothing, data from market research firm Sensor Tower shows the audience may be expanding.
The number of mobile app downloads for nine resale marketplaces the firm tracks -eBay, OfferUp, Poshmark, Mercari, Craigslist, Depop, ThredUp, TheRealReal and Vinted – increased by three per cent between January and the end of March, the first quarterly gain in three years, Sensor Tower said.
The firm estimates downloads of the apps for eBay, Depop, ThredUp and The RealReal also surged compared to a year earlier for the week of March 31, which was when Trump unveiled since-paused punitive tariffs on dozens of countries. Circana’s Classi-Zummo said that while customers used to seek out collectible or unusual vintage pieces to supplement their wardrobes, she has noticed more shoppers turning to secondhand sites to replace regular fashion items. “It’s still a cheaper option” than buying new, even though retailers offer discounts, she said.
A TARIFF-FREE GOLD MINE LURKING IN CLOSETS AND WAREHOUSES
Poshmark, a digital platform where users buy and sell preowned clothing, has yet to see sales pick up under the tariff schedule Trump unveiled but is prepared to capitalise on the moment, Chief Executive Officer (CEO) Manish Chandra said.Companies operating e-commerce marketplaces upgrade their technology to make it easier to find items.
A visual search tool and other improvements to the Poshmark experience will “pay long dividends in terms of disruption that happens in the market” from the tariffs, Chandra said.
Archive, a San Francisco-based technology company that builds and manages online and in-store resale programmes for brands including Dr Martens, The North Face and Lululemon, has noticed clothing labels expressing more urgency to team up, CEO Emily Gittins said.
“Tapping into all of the inventory that is already sitting in the US, either in people’s closets or in warehouses not being used”, offers a revenue source while brands limit or suspend orders from foreign manufacturers, she said.
“There’s a huge amount of uncertainty,” Gittins said. “Everyone believes that this is going to be hugely damaging to consumer goods brands that sell in the US So resale is basically where everyone’s head is going.”
Stock analysts have predicted off-price retailers like TJ Maxx and Burlington Stores will weather tariffs more easily than regular apparel chains and department stores because they carry leftover merchandise in the US.
PRICED OUT OF THE PREVIOUSLY OWNED MARKET
Still, resale vendors aren’t immune from tariff-induced upheavals, said founder and CEO Rachel Kibbe of Circular Services Group, a firm that advises brands and retailers on reducing the fashion industry’s environmental impact.
US sellers that import secondhand inventory from European Union countries would have to pay a 20-per-cent duty if Trump moves forward with instituting “reciprocal” tariffs on most trading partners and eliminates an import tax exception for parcels worth less than USD800, Kibbe said.
A circular fashion coalition she leads is seeking a tariff exemption for used and recycled goods that will be offered for resale, Kibbe said. Trump already ended the duty-free provision for low-value parcels from China, a move that may benefit sellers of secondhand clothing by making low-priced Chinese fashions pricier, she said.
Co-founder and CEO of the online consignment marketplace ThredUp, James Reinhart, said the removal of the “de minimis” provision and the 145 per cent tariff Trump put on products made in China would benefit businesses like his.
He doubts creating resale channels would make a big difference for individual brands.
