Online thrift store ThredUp expanding to Canada

Megan Roney shops online at a coffee house in Denver, Monday, Nov. 28, 2014. (The Denver Post / Helen H. Richardson)

TORONTO - After operating in the U.S. for nearly a decade, online thrift store ThredUp is expanding into Canada and setting its sights on shoppers who want to stay stylish but save their dimes.

Some retail experts caution the company may find it difficult amid the growing popularity and proliferation of charity-based organizations and fast-fashion retailers who already appeal to the budget-conscious.

But ThredUp co-founder and CEO James Reinhart says when the San Francisco-based startup researched the Canadian market, it found signs of "pent-up demand" from consumers who wanted an easier way to shop for used clothing and apparel.

"I always thought that ThredUp was not solving just a U.S. problem," he said in a recent interview. "It's really a first-world opportunity, so the ability to expand to other countries was something we really wanted to do."

The company, which was founded in 2009, says it's on track to sell more than 10 million items this year.

The website specializes in used women's and children's apparel, shoes and handbags at up to 80 per cent off the new retail price.

ThredUp buys its inventory from people who send in bags of unwanted clothing, which the company reviews and then notifies the sender about how much they are willing to pay.

The company began accepting Canadian orders earlier this month, and if all goes well, Reinhart says it would like to have distribution centres in Western and Eastern Canada so it could begin accepting items from Canadians. It also would like to open an office in Toronto, where one of the company's co-founders and current chief technology officer is from.

Retail analyst Sally Seston says ThredUp will face stiff competition in Canada from shops such as Value Village, Salvation Army, Plato's Closet and Once Upon A Child and will also have to fight for shoppers' dollars with retailers such as Winners and Saks Off Fifth, which sell new clothing for less than the suggested retail price.

ThredUp estimates that the apparel resale market is worth US$18 billion in the United States, with expectations that it will balloon to US$33 billion in 2021. It doesn't have reliable Canadian data available, but Seston forecasts the market is around 10 per cent of the United States.

"People who are going to shop at a retail mall quality resale clothing store are more about the financials of being able to dress and look current on a very restricted budget," said Seston, a principal at Retail Category Consultants.

"By bringing it online, it eliminates the stigma of walking into a second-hand store to buy things."

Retail expert Maureen Atkinson says that shoppers may be lured to ThredUp by the prospect of finding a bargain, but they will have to do the math, including calculating shipping and any other charges, to see if a purchase actually ends up being a good deal.

"Economically if I can get a new T-shirt from H&M or Forever 21 for $10, and ThredUp is going to charge me $5 for a second hand one - is the value there?," asked Atkinson from J.C. Williams Group.

Although the company's biggest customer base may be those hunting for a bargain, the environmentally friendly aspect of reusing clothing will also hold its appeal for some shoppers, she added.