How the circular economy is shaping retail

Resale platform Trove has acquired competitor Recurate, according to a Tuesday news release.

The acquisition will allow Trove, which currently works with brands on resale site building and nonnew inventory management, to expand its offerings to include peer-to-peer trade-ins as well as e-commerce integration for Shopify-based brands, per the release.

Trove’s 15 existing resale partners, which include Canada Goose, Carhartt, Patagonia and On, will be joined by 29 Recurate brands such as Steve Madden, Frye and Michael Kors, said Trove CEO Terry Boyle in an interview.

Prior to the acquisition, Boyle said Trove “had between 60% and 65% of branded resale traffic,” and following the completion of the deal, the company expects to control between 75% and 80% of that market in the U.S. 

Both companies are private, and financial terms of the acquisition were not disclosed.

Wilson Griffin, Recurate’s co-founder and former CEO, will join Trove’s executive team, as will Adam Siegel, also a co-founder and the company’s former chief product officer and chief operating officer.

“Joining forces with Trove allows us to offer a one-stop shop with best-in-class resale solutions,” Griffin said in the release. “We’re excited to be able to offer these solutions to our existing customers while bringing more brands into resale.”

Boyle said that although Trove acquired a competitor in the market, the two companies offer different, complementary resale solutions. 

“Essentially, they fill the gap in our product portfolio, because we do talk to a lot of clients that have an interest in peer-to-peer, and that’s not something we were able to service until now,” Boyle said, adding that he doesn’t expect the deal to change pricing structures on the client side.

“This is really about building a one-stop shop for brands so they can make an easier decision,” Boyle said. “We’re focused on having more of the market participate in resale. Once clients realize that it’s not only good for the environment, but it’s good for their business and drives profitable growth, then we start to see people participate, and that’s really what we’re focused on. And in some ways, this transaction makes it easier for brands to get into the space.”

Looking ahead, Trove is eyeing global expansion plans, particularly in the EU and the United Kingdom, per the release.

“We think that’s an exciting area,” Boyle said. “Both Trove and Recurate have already made the changes to the product to support the EU, and we're seeing a lot of activity there.”

ThredUp will exit Europe and is exploring strategic alternatives for Bulgaria-based Remix, a secondhand apparel company it acquired in 2021 for around $28 million, the company announced as part of its Q2 earnings on Monday.

For the quarter, the company reported revenue of $79.8 million, down 3.5% year over year. Revenue for the U.S. was flat, while Europe saw an 18% drop compared to the year-ago quarter. Net loss for the quarter narrowed from $18.8 million last year to $14 million.

The company also pulled back from a new customer growth strategy it tested. ThredUp estimates it lost around 90,000 potential customers due to the now-abandoned strategy.

ThredUp decided it can’t make Europe work. 

Its European efforts struggled, even as the company invested over $20 million in cash in it over six quarters. Along with a revenue drop during the second quarter, its European unit reported a negative 23% adjusted EBITDA margin, despite “significant attention from our U.S. team,” CEO James Reinhart said on a Monday call with analysts. “Our European business really struggled,” he said regarding Q2. 

The company acknowledged that its European arm has been dragging on its profitability and expects to present U.S.-only operating results by Q3.

ThredUp is also looking to divest Remix, a secondhand platform it acquired three years ago that operates as an independent unit under the larger ThredUp umbrella. At the time of the company’s purchase, ThredUp touted the company’s operating platform and compared it to its own. 

ThredUp only in May announced that Florin Filote was joining the company as its general manager of Europe. “We’ve made great strides in growing our European business since entering the market in 2021, more than doubling our revenue and evangelizing secondhand across Central and Eastern Europe,” Reinhart said at the time of Filote’s appointment.

Filote will stay on with ThredUp and continue to lead Remix as it transitions into a stand-alone company, a company spokesperson told Retail Dive.

In what they called a “disappointing” quarter, Wedbush analysts led by Tom Nikic in a Monday note said that “pulling the plug on Europe” is “probably a good idea.” The company will either sell or write down its European business and focus all of its attention on the U.S., Nikic wrote.

Additionally, the company made a decision to change its new buyer strategy from a percentage-based discount offer to a dollar-based discount offer. The effort was launched in the middle of the first quarter and backfired, resulting in the loss of tens of thousands of potential new customers. The company had a $3 million negative impact in the second quarter because of it, but Reinhart said the company has course-corrected and reverted back to its previous strategy on June 1, resulting in “immediate recovery” for that month and into July.

ThredUp this week also launched multiple artificial intelligence-driven shopping tools to improve product discovery on its platform. “I want to emphasize, this is the most significant product launch we’ve had at ThredUp in a long time, arguably since we launched the company more than a decade ago,” Reinhart said on the company’s earnings call. “Much of the customer innovation from here will build on top of this foundational technology for merchandising, discovery and inspiration.”

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More than 70% of consumers globally plan to buy used goods this year, according to eBay’s 2024 Recommerce Report released in May. Additionally, 86% of shoppers surveyed have bought or sold a pre-loved item in the last 12 months, the report found.

EBay sales of apparel and accessories with “thrifted” in its item description grew over 400% globally from March 2023 to March 2024. Half of eBay’s sellers reported an increase in selling pre-loved compared to 1-5 years ago.

Per eBay, millennials and Gen Z are driving recommerce. The report said 66% of Gen Z and 62% of millennials agree that shopping pre-loved has grown to be personally important.

Social, economic and climate pressures have continued to shape how consumers spend. A 2023 survey from OfferUp and Global Data found that the stigma of buying pre-owned has waned, helping to propel a new era in the circular economy. 

According to the eBay report, which gathered consumer and seller insights to explain pre-loved shopping behavior, 53% of customers said fast fashion is environmentally harmful and contributes to unfair labor practices. Sixty-four percent of eBay shoppers surveyed feel recommerce improves the planet's health.

“Recommerce buyers are looking for value, passions, and meaning in their purchases — with the added benefit of sustainability. Together, we’re propelling the Era of Recommerce,” said Renée Morin, eBay’s chief sustainability officer.

Pre-loved and refurbished items make up 40% of eBay’s gross merchandise volume and 77% of customers say buying pre-loved is a recent trend. Many have turned to the secondhand market, and found the joy in bargain-hunting again. 86% of shoppers surveyed have bought or sold a pre-loved item in the last 12 months.

With resale’s rise in popularity, eBay wants to elevate its marketplace to feel “even better than buying new,” Charis Marquez, vice president of fashion at eBay said in a statement.

The report gathered opinions from more than 28,000 eBay sellers and buyers globally. The top pre-loved purchases across categories are in clothes (48%), books (34%), shoes (24%), home and garden (23%), and tech and electronics (22%).

“Ebay has been a driving force behind recommerce, and we continue to invest in tools and technology that fuel the circular economy,” Ebay president and CEO Jamie Ianonne said in a statement.

Globally, eBay shoppers say there are five top reasons for shopping preloved: to save money (62%), for sustainability and environmental benefits (26%), because they’re unable to find a specific item new (25%), they found an affordable brands as pre-loved (24), or because its a collectible (18%).

Similarly, ThredUp releases an annual resale report with its own findings, supporting that preloved apparel makes up a significant portion of customer’s spend and closets. The consignment company found that in 2023, 52% of respondents bought secondhand apparel. Also broken down by age group, 65% of Gen Z and millennials shopped preloved, up 5 points from 2022 as the youth continue to drive interest.

From eBay’s respondents, Gen Z (58%) and millennials (51%) agree that making extra money is a primary motivator for listing pre-loved items. Sustainability is important to 72% of Gen Z and 70% of millennials when deciding to sell their items on eBay. Across sellers globally, 79% surveyed starting on eBay’s marketplace to sell pre-loved goods.

Both eBay and ThredUp respondents agree their pre-loved shopping habits are financially motivated. Over half of ThredUp customers (55%) said they plan to continue purchasing used clothing given the economy doesn’t improve in 2024. For 6 in 10 ThredUp consumers, the top reason they shop secondhand is to snag a better deal.

Half of Gen Z eBay buyers reported saving money to splurge and 21% shop pre-loved once a month. Millennials reported participating in recommerce more frequently with 9% buying weekly and 24% monthly. 

Japan-based sportswear brand Asics released its Nimbus Marai running shoe on April 12 designed to be remade at the end of the shoe’s life cycle, the company announced. Along with the release, the brand also launched a new returns program to encourage runners to give back their shoes at the end of their use.

Available in men’s and women’s, the Nimbus Mirai shoe retails at $180 in-store and online. The shoe can be returned at Asics stores or by shipping at participating markets including the U.S., UK, Netherlands, France, Japan, Australia and New Zealand.

The shoes are part of the brand’s circular strategy to ensure a fully recyclable shoe, including its sole. The brand aims to achieve net-zero carbon emissions by 2050, per the release.

The Nimbus Mirai is the second sustainable shoe Asics released in less than a year. In September, the company launched low-carbon sneaker Gel-Lyte III CM 1.95, which at the time the company claimed to be “the lightest emissions sneaker on the market.”

Asics is calling the Nimbus Mirai one of its most advanced shoes.

“It has remained our focus not to compromise the product's performance at all, so that runners can wear the shoe as they would any other from Asics – protected and supported as they replenish their body and mind,” Nimbus Mirai project leader of product development Fumitaka Kamifukumoto said in a statement. “We ask runners to take an extra step with this shoe, however, and bring it back to us once they have finished with it. That way, we can continue our mission towards creating a Sound Earth for future generations."

Shoes have always been designed for a single use, according to the company. Asics referenced data by Statista on worldwide footwear production, claiming that roughly 23.9 billion shoes globally end up in landfills or incinerated, adding that its “simply not sustainable if we're to create a Sound Earth.” 

The uniform polyester shoe has no overlays making it easy to be sorted through and recycled, per the company. The brand created its own bond for the shoe with an in-house glue that also allows the shoe to be pulled apart for its next usage. The upper detaches from the sole so that the entirety of it goes through recycling. The company said 87.3% of the recycled upper can be made into a new polyester material ready to be remade again, per Asics’ own testing.

The shoe’s midsole is made from approximately 24% renewable source, including sugar cane processing leftovers. Next, Asics is focused on giving the sole a second life and also making it recyclable. 

Circular footwear is a sustainable transition in the industry other retailers have also made. In November 2023, EarthDNA, a nonprofit climate advocacy platform, partnered with a set of brands to create the FootWear Collective, an initiative promoting a circular footwear economy. The sustainable partners included On, Reformation, Target, New Balance, Brooks Running and Crocs. 

Allbirds launched a zero-carbon footwear design and toolkit in June last year. The “M0.0NSHOT” shoe has a 0.0 kilogram carbon footprint and the company’s “Recipe B0.0K” describes the making of the shoe including materials, manufacturing and carbon footprint calculation in detail.

 

Advancing toward its goal of more sustainably produced garments, Lululemon has teamed up with Samsara Eco, an Australian environmental technology company, to introduce the first enzymatically recycled nylon 6,6 product, according to a press release on Tuesday.

Using recycled nylon 6,6, Lululemon has created samples of its Swiftly Tech Long-Sleeve Top — the first time this type of nylon has been recycled in this way, according to the retailer. The samples are a “key milestone” that brings fashion closer to creating a circular ecosystem, according to Samsara Eco. 

Lululemon currently uses nylon 6,6 for many of its products, including its Align and Wunder Train leggings. The Swiftly samples take Lululemon nylon apparel at the end-of-life stage — including leggings — and combine it with other non-textile materials to create recycled nylon for use in new Lululemon products.

 

Lululemon entered a multiyear agreement last year with Samsara Eco to scale circular efforts through textile-to-textile recycling. The partnership is part of Lululemon's 2030 goal of making all of its products with "preferred materials and end of use solutions," the company said.

When the two announced their collaboration, Lululemon said that it had invested an undisclosed amount into Samsara. Now, the two companies have launched patent-pending tech that makes it possible to extract nylon 6,6 from end-of-life stage textiles.  

Nylon 6,6 is a commonly used plastic in the textile industry and “has been notoriously difficult to recycle” due to its properties, according to Samsara Eco. 

"The Lululemon Swiftly top samples go beyond material innovation — they represent the exciting possibilities and impact that can be achieved through collaboration and cross-industry partnership," Yogendra Dandapure, vice president of raw materials innovation at Lululemon, said in a statement. "This breakthrough not only signals a turning point for sustainable innovation in apparel, but for all industries looking to shift towards more circular models.”

The activewear brand is experimenting with alternative materials in other ways as well, releasing its first products made with plant-based nylon in April last year. Meanwhile, other activewear brands have been introducing eco-friendly fabrics and using them more in their manufacturing process. Last August, Vuori unveiled its BlissBlend fabric, which is made of 75% recycled materials and is used in the brand's AllTheFeels leggings and bras. Nike in 2022 rolled out a new fabric made of 70% recycled content by weight, which has a 75% lower carbon footprint than standard knit fleece. Swiss athletics brand On said it grew its use of recycled polyester in products to 85% in 2022, progressing toward its goal of making all of its products from recycled polyester and polyamide this year. 

Though Lululemon has a series of sustainability goals it’s working toward, it has recently faced accusations of greenwashing. Stand.earth, an environmental advocacy group, recently filed a complaint with the Competition Bureau Canada, urging the agency to investigate the conduct of Lululemon. In the complaint, the organization alleged that Lululemon's greenhouse gas emissions doubled following its 2020 "Be Planet" marketing campaign. The company did not directly address accusations of its marketing campaign, but a Lululemon spokesperson said in an email to sister publication Fashion Dive that the company recognizes that the majority of impact comes from emissions from the broader supply chain.

New Balance on Monday announced the launch of a resale program on its website, according to a press release sent to Fashion Dive.

The program, called Reconsidered, will allow consumers to shop for pre-owned shoes, consumer returns and “cosmetically imperfect footwear that cannot be sold as new,” but have been “cleaned as needed,” per the release.

The company is marketing the Reconsidered program as part of its sustainability commitments, which include focusing on the longevity and circularity of products. Last year, New Balance was among brands that helped launch the Footwear Collective, an advocacy group meant to promote a circular footwear economy.

The Reconsidered platform includes an option to trade in merchandise, where consumers can send their used shoes to stores or by mail to receive a voucher for the New Balance e-commerce site.

Reconsidered is supported by Archive, a branded resale platform. Other companies that have partnered with Archive on such efforts include Maje and Ulla Johnson.

New Balance also partnered with circular textile company Tersus Solutions on product cleaning, fulfillment and warehousing, per the release. Tersus, which uses waterless cleaning technology to wash used products, has also worked with Ralph Lauren, Eileen Fisher and Canada Goose, according to its website.

“We know the footwear industry has a significant environmental impact, including too many products ending up in a landfill,” John Stokes, director of sustainability at New Balance, said in the release. “There are many things that have to shift. Launching Reconsidered is one piece of the puzzle with a program objective to help extend product life for some of our product and get the most from what is already made.”

As part of its larger sustainability initiative, New Balance also aims to run owned operations on renewable energy by 2025. Other goals include sourcing lower-impact materials and transitioning to lower carbon transportation.

New Balance sneakers are popular items on resale platform StockX, according to several of its recent trend reports. By bringing resale efforts in-house, New Balance could create increased competition for StockX, which recently announced it was restructuring its business and laying off dozens of corporate employees, according to a report from Modern Retail.

Other footwear brands that have recently launched their own resale platforms include Brooks Running and On.

A new petition with support from resale platforms ThredUp, Vestiaire Collective and others is seeking to end taxation on secondhand apparel in an effort to promote a more circular economy.

American Circular Textiles, a coalition led by circularity and sustainability consulting firm Circular Services Group, launched the petition with its member companies in an effort to eliminate what it called “double taxation” on second hand goods, repairs and alterations, according to a press release Friday.

The campaign says that secondhand apparel items are taxed twice: once when first sold and again when resold. It argues that the increased cost from taxation makes resold items less appealing to consumers. 

“This policy not only discourages sustainable shopping practices but also hinders the growth of the secondhand market, repair options and the circular economy,” American Circular Textiles said in the release.

The secondhand apparel market is growing. ThredUp’s annual resale report released earlier this year found that U.S. consumers spent nearly half of their clothing budget on secondhand items, and the global secondhand market grew 18% last year to reach a $197 billion valuation.

The petition says that the elimination of the tax will incentivize reuse and repurposing of garments to reduce the fashion industry’s environmental impact, and argues that the change would additionally benefit lower-income individuals and families.

In addition to ThredUp and Vestiaire Collective, the group’s membership also includes resale platform Fashionphile, resale market Arrive Recommerce, T-shirt blanket company Project Repat, textile recycling company Sortile, as well as weaving tech company Unspun.

In the release, Rachel Kibbe, CEO and founder of American Circular Textiles, said that as apparel and footwear sales rise, “more shoppers are turning to secondhand first.”

“Ending double taxation is not only the fair and just thing to do, it will also spur economic growth and strengthen the trend towards shopping for well-made clothing that can be reused and/or repaired rather than tossed into the ever-growing piles of apparel waste,” Kibbe said.