Secondhand stores are poised to benefit if US tariffs drive up new clothing costs

NEW YORK AP Stores selling secondhand clothes shoes and accessories are poised to benefit from President Donald Trump s contract war even as businesses the world over race to avert feasible 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 for clothes and for leather goods noting U S 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 industry that is declining revealed Kristen Classi-Zummo an apparel industry analyst at realm research firm Circana What I think is going to continue to win in this chaotic atmosphere are channels that bring value The outlook for pre-owned fashion nevertheless comes with unknowns including whether the president s tariffs will stay long enough to pinch consumers and change their behavior It s also unclear whether secondhand purveyors will increase their own prices either to mirror the overall sector or in response to shopper demand A new audience courtesy of sticker shock Jan Genovese a retired fashion executive 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 explained 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 territory already was flourishing before the specter of tariffs bedeviled the U S fashion industry Management consulting firm McKinsey and Co predicted after the COVID- pandemic that global revenue from pre-owned fashion would grow 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 evidence from realm 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 between January and the end of March the first quarterly gain in three years Sensor Tower mentioned 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 which was when Trump unveiled since-paused punitive tariffs on dozens of countries Circana s Classi-Zummo declared that while customers used to seek out collectible or remarkable 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 revealed A tariff-free gold mine lurking in closets and warehouses Poshmark a digital platform where users buy and sell pre-owned clothing has yet to see sales pick up under the tariff schedule Trump unveiled but is prepared to capitalize on the moment CEO Manish Chandra commented Companies operating e-commerce marketplaces upgrade their system 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 arena from the tariffs Chandra revealed Archive a San Francisco-based apparatus company that builds and manages online and in-store resale programs for brands including Dr Martens The North Face and Lululemon has noticed clothing labels expressing more urgency to gang up CEO Emily Gittins declared Tapping into all of the inventory that is already sitting in the U S 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 mentioned There s a huge amount of uncertainty Gittins commented Everyone believes that this is going to be hugely damaging to consumer goods brands that sell in the U S 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 U S Priced out of the previously owned realm Still resale vendors aren t immune from tariff-induced upheavals revealed Rachel Kibbe founder and CEO of Circular Services Group a firm that advises brands and retailers on reducing the fashion industry s environmental impact U S sellers that import secondhand inventory from European Union countries would have to pay a duty if Trump moves forward with instituting reciprocal tariffs on the bulk trading partners and eliminates an import tax exception for parcels worth less than Kibbe stated A circular fashion coalition she leads is seeking a tariff exemption for used and recycled goods that will be offered for resale Kibbe mentioned 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 mentioned James Reinhart co-founder and CEO of the online consignment marketplace ThredUp stated the removal of the de minimis provision and the 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 Brands will explore this and they may do more but I don t see them massively changing their operations Reinhart noted I think they re going to be figuring out how to survive And I don t think resale helps you survive Rebag an online marketplace and retail chain that sells used designer handbags priced from to tens of thousands of dollars expects tariffs to help drive new customers and plans to open more physical stores CEO Charles Gorra declared Gorra commented the company would analyze prices for new luxury goods and adjust what Rebag charges accordingly The two historically rose in tandem but Rebag could not match Chanel s price increase last year because of lower resale demand Gorra commented That has nothing to do with the tariffs he mentioned Consumers are feeling priced out Norah Brotman a senior at the University of Minnesota buys the bulk of her own clothes on eBay She also thrifts fashions from the s and early s at Goodwill stores and resells them on Depop If tariffs upend the economics of fast fashion and discourage mindless consumption Brotman would count that as a plus I would love if this would steer people in a different direction she mentioned