Your Old Clothes Are Worth Billions
Secondhand apparel retail is a booming business, but turning a profit is harder than it sounds
3 min
Closets are full of unworn clothes ready for purging, thrifting is in vogue , and everybody’s looking for a good deal these days. It all sounds like a golden business opportunity—if anyone can figure it out.
Americans on average throw away some 70 pounds of clothes a year, and thrifting is becoming more popular by the day—particularly among younger consumers. The U.S. secondhand apparel market was worth about $43 billion last year, according to an annual market report from the online apparel reseller ThredUp . It estimates that the market could grow about 11% a year on average through 2028. The market is fragmented, with about 74% of thrift stores being independently run, according to a report from Piper Sandler.
Companies specialising in thrift, though, are struggling to stitch together a compelling investment case. Shares of the online seller ThredUp and the bricks-and-mortar thrift-store chain Savers Value Village are each down around 29% year to date. The luxury online resale platform RealReal has fared better, but in large part thanks to a debt exchange it announced in late February to address liquidity concerns. ThredUp and RealReal are both down significantly from their peaks a few years back.
This could simply be air coming out of highly inflated expectations. ThredUp and the RealReal made their debuts with much fanfare in 2021 and 2019, respectively. Savers listed last year with a lofty valuation. But sales growth for all three companies has slowed, and they are all growing slower than the overall market.
Nonprofits such as Goodwill control a sizeable portion of the secondhand market, with a steady supply of donations, and eBay dominates the resale market online. ThredUp and RealReal’s bet is that consignors and buyers would be willing to pay a premium for a more convenient selling and buying experience. Sellers need only mail in or drop off their goods, and the platforms do the work of photographing, pricing and tagging each item by size, brand, colour and condition so that items are easily searchable. For RealReal, there is an extra human step of making sure the products aren’t fakes. A single-item distribution system is difficult to recreate and is therefore a powerful moat, says Dylan Carden, an equity analyst at William Blair, referring to ThredUp.
But the expensive process also means profitability is distant: Neither ThredUp nor RealReal is expected to turn a profit on the basis of generally accepted accounting principles for the next four years, according to analyst estimates polled by Visible Alpha.
Balancing the quantity of supply with quality has been difficult. ThredUp last year introduced fees that are subtracted from the payout customers receive if their items are sold on the platform. The change is meant to encourage consumers to send in high volumes of high-quality clothes. RealReal last year tweaked its commission structure to motivate consignors to send in expensive items priced above $100.
While these moves could attract higher quality, they might also divert consignors to platforms such as Poshmark and eBay, where selling involves more work but potentially higher payout. Notably, both of those marketplaces have authentication features for high-end items, and eBay has been trying to simplify sellers’ listing process through generative AI .
Meanwhile, the bricks-and-mortar Savers comes with the promise of a more efficient shopping experience than nonprofits. Piper Sandler estimates that its sales per store is nearly twice that of Goodwill and more than six times that of the Salvation Army. But the retailer faces similar quality challenges.
Only about half the items that Savers gets actually end up on the sales floor, and of those about half actually are sold, according to a company filing. Savers receives all of its items—whether directly or indirectly—by paying nonprofits by the pound for donated products. Savers has previously said that it might be able to snag higher-quality donations by placing its drop-off trailers—known as GreenDrop—near locations frequented by wealthier shoppers.
While Savers has been profitable for the past three years, same-store sales have unexpectedly slowed in recent quarters, and its investment case is highly dependent on new-store growth. This remains a risk. Previous management had trouble opening up stores because they weren’t able to procure enough supplies of secondhand clothing, notes Peter Keith, equity analyst at Piper Sandler, who is still confident about the company’s ability to expand.
Much like that shirt you only wore once, secondhand-apparel sellers so far hold more promise than substance.
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The Federal Budget may have softened some of its proposed tax reforms, but it has exposed a bigger issue: too many families are relying on wealth structures that no longer reflect the realities of modern life.
3 min
For many Australians, the 2026 Federal Budget initially felt like a direct challenge to the way wealth is created, held and transferred between generations.
The headlines were immediate: changes to capital gains tax, reforms to discretionary trusts, restrictions on negative gearing and increased scrutiny of investment structures. Unsurprisingly, affluent families, business owners and investors began asking the same question:
Is the way we hold our wealth still fit for purpose?
In recent days, the government has announced several significant amendments following industry consultation and public feedback, including exempting testamentary trusts from the proposed 30 per cent minimum tax and expanding capital gains tax concessions for small businesses.
The backdown is welcome. But it also highlights something much bigger.
This Budget has accelerated a conversation that many Australian families have been postponing for years.
The conversation is not really about tax. It is about wealth stewardship.
For decades, Australians have built wealth through businesses, property, investments and careful long-term planning. Yet many families have not revisited the legal structures surrounding those assets in years, sometimes decades.
We often see clients who have spent years building significant wealth, only to discover their legal arrangements no longer reflect their current circumstances.
Their children are now adults. They may own multiple properties.
They may have sold a business, entered a second marriage, become grandparents or accumulated digital assets that did not exist when their original estate plans were prepared.
The trust that distributes income may need to be reconsidered. The bucket company may no longer be so attractive.
The Budget has simply exposed a reality that already existed: wealth structures cannot remain static while life continues to evolve.
Importantly, trusts themselves are not the issue.
Trusts are legitimate planning tools that provide flexibility, protection and continuity. When used appropriately, they allow families to adapt to changing circumstances over time.
And neither is tax the issue, really. Getting the fundamentals right is more important for long-term, sustainable wealth than a few favourable tax treatments around the edges.
The real issue is complacency.
Too often, families create structures and assume the job is done. It isn’t.
Estate planning is no longer a document you sign once and file away in a drawer. It is an ongoing process that should evolve alongside your life.
We are also seeing a broader shift in how Australians define wealth itself. It is no longer just the family home and an investment portfolio.
Modern wealth includes businesses, digital assets, cryptocurrency, intellectual property, frequent flyer points and increasingly complex family arrangements.
At the same time, Australians are living longer than ever before, meaning wealth may need to support multiple generations simultaneously. This creates new responsibilities and new risks.
How do you help your children enter the property market without exposing family wealth to relationship breakdowns?
How do you structure wealth so that it remains a source of opportunity rather than future conflict?
These are the questions families should be asking now.
The recent debate surrounding testamentary trusts also serves as an important reminder that policy decisions can have unintended consequences for vulnerable Australians. It is encouraging that the government has listened to feedback and clarified its position.
But the lesson remains: the wealth landscape is changing.
Increasingly, governments, regulators and tax authorities are paying closer attention to how wealth is held and transferred. That means families cannot afford to adopt a “set-and-forget” approach to their structures.
The families who will be best placed for the future are not necessarily those with the greatest wealth.
They are the families with the greatest clarity. Clarity around ownership, succession and governance. And clarity around how wealth will transition from one generation to the next.
Ultimately, preserving wealth is not about avoiding change.
It is about preparing for it.
Because the greatest risk is not change itself.
It is losing the ability to respond to it.
Anthony Hunt is Co-Founder of Wealth Lawyers and former COO of Westpac Private Bank. He advises business owners, investors and affluent Australian families on wealth protection, succession planning and intergenerational wealth transfer
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