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ThredUP Forges Ahead with its War on Fast Fashion Amid Cost-Cutting Initiatives

ThredUP opens a hotline to help Gen Z fight its fast fashion addiction.

Resale platform ThredUP has debuted a new, light-hearted marketing ploy in its ongoing battle against “fast fashion addiction,” mere days after announcing it was joining the ranks of tech companies cutting staff amid an economic slowdown.

Strong Q2 Masks Impending Slowdown

On Aug. 15 ThredUP Co-founder and CEO James Reinhart announced during a Q2 earnings call that the company would lay off approximately 15% of its corporate workforce and close its processing center in Vernon Hills, Ill. The company also plans to slow down the build out of its new Dallas fulfillment center, which is a key component of ThredUP’s long-term growth strategy. This despite strong performance in Q2, during which the company saw revenue jump 27% YoY to $76.4 million and gross profit growth of 19% YoY to $52.6 million.

A potential slowdown in the second half of the year has the company worried though, as Reinhart indicated on the earnings call: “All the data that we’re seeing indicates that consumer health is deteriorating, especially among the budget consumer, who makes up a meaningful portion of our customer base,” he said. “As such we saw our business slow in the final weeks of Q2, a trend that has continued into Q3. Given the volatility we’re seeing with the consumer, it’s incredibly hard to predict exactly how the customer is going to behave in the back half of the year, a period during which we also have challenging year-over-year comparisons.”

Approximately 60% of ThredUP’s customer base has a household income of less than $100,000, and Reinhart noted a “clear bifurcation” between the company’s premium and value shopper segments. While average order for value shoppers declined 7% in Q2, AOV for the premium segment increased 15%. In adjusting to these changing dynamics, Reinhart pointed to the flexibility of the company’s marketplace model, which allows it to modify pricing, seller payouts and processing cadence as demand shifts. Despite that agility, cost-cutting measures were in order as a “proactive step towards our profitability goals,” said Reinhart.

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A Fast Fashion Confessional to Help Gen Z

Two days after delivering this sobering news, the company debuted a new hotline designed to help Gen Z “resist the temptation of fast fashion and embrace more sustainable shopping habits.” The hotline, which is being fronted by “Stranger Things” star Priah Ferguson, was inspired by the one in three Gen Z shoppers who said they “feel addicted to fast fashion” in a recent company survey.

Customers in the U.S. can now call 1-855-THREDUP to hear from Ferguson about why they should give up their fast fashion habit. Callers can also stay on the line to learn more about the environmental impact of fast fashion and how thrifting can be a sustainable alternative, as well as leave a voicemail with their own fast fashion confession.

“At ThredUP, we’re committed to inspiring a new generation of consumers to think secondhand first,” said Erin Wallace, VP of Integrated Marketing at ThredUP in a statement. “Our data shows that college students want to quit shopping fast fashion, but we know it’s hard to resist. That’s why we’re thrilled to partner with Priah. Together, we set out to make it easier than ever for shoppers to kick the fast fashion habit and embrace a healthier way to shop.”

This isn’t ThredUP’s first volley in its war on fast fashion — earlier this year, the platform launched a sustainability-focused marketing campaign targeted to shoppers in the San Francisco Bay Area during a Shein pop-up event.

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