Shift to Thrift: thredUP CEO James Reinhart ’01 on the Circular Future of Fashion
Close your eyes and picture the founder of thredUP. What, you mean it’s not a 20-something male Harvard MBA? James Reinhart ’01 didn’t see that coming either, but career paths work in mysterious ways.
Reinhart’s unconventional, un-fashion trajectory started with a five-year stint teaching and doing business development for a prep school in Santa Cruz, CA. From there, he went on to earn his MBA. One life-changing day in grad school, he had an aha moment that set the wheels for thredUP in motion.
Last March, Reinhart took the company public. We talked with him about what drove that decision, why thredUP is poised to lead the industry to a “circular future,” and how his undergrad years at BC contributed to his extraordinary success story.
Q: You were still in your 20s when you founded thredUP. Did the 20-something version of yourself think you’d someday be running one of the nation’s leading online marketplaces for high-quality used apparel?
Reinhart: It’s often true that necessity is the mother of invention. Back in 2009 when I was a grad student, I realized I had a closet full of clothes that I was never going to wear again, so I took them down to the local consignment store to sell them. I was turned away almost immediately because they weren’t considered luxury items. Disappointed in the outcome, I realized so many people probably go through a similar experience. As an entrepreneur, you have these moments where you have an idea, and the data suggests it will work, so I set out to create something different with thredUP.
Q: What drove you to get here, and what keeps you going?
Reinhart: In my 20s, I knew we had uncovered a market prime for disruption, but success didn’t happen overnight. thredUP was rejected many, many times before someone took a chance on us. Back then, the perception of used clothing was very different than it is today, and the technology wasn’t as evolved. We started small and eventually got smarter through constant iteration. We’ve come a long way since our founding but we’re just getting started. The opportunity in front of us is what keeps me feeling ambitious and motivated.
Q: A year after the pandemic started, you took thredUP public. What pushed you to make that decision and how has that changed your business?
Reinhart: The timing was right. We were ready to be a public company. Our business fundamentals were strong, our team was in great shape, and the market opportunity, was expanding. According to thredUP’s 2021 Resale Report, the secondhand market is expected to double to $77 billion in the next five years. That alone is a massive opportunity but there are so many other factors that point toward resale’s success and upward trajectory. Consumer preferences are changing as there’s a collective American consciousness around consumption. And major brands, like Crocs and Madewell (fellow BC grad Libby Wadle is the CEO—go Eagles!) are embracing more circular business models like resale as a result.Taking thredUP public gave us the capital and credibility that resale is as big as we believe it is and the confidence in our ability to power the market. Taking thredUP public gave us confidence in our ability to power the market.
Q: Your 2021 Resale Report touches on the fashion industry’s impact on climate change (10% of the world’s carbon emissions) and the role the industry can play in solving the problem. Are consumers embracing the “shift to thrift” to be part of the solution or to save money—or both?
Reinhart: The fashion industry is making progress toward a circular future. We’re already seeing this play out as consumers prioritize sustainable lifestyle choices, retailers embrace resale as a new growth channel, and policy makers get on board with circular fashion. Findings from our 2021 Resale Report show that 51 percent of consumers are more opposed to eco waste and 60 percent are more opposed to wasting money than before the pandemic. Q: What is thredUP’s point of view on how the government can play a role? Reinhart: On the policy front, there is a long history of government action to curb pollutive industries. We’ve seen regulation and incentives for everything from plastic bags to electric vehicles, and we believe circular fashion is the next frontier in sustainable policy and that government support could accelerate its adoption and ultimately its impact.
Q: You had a big year in 2021—going public, launching your first 360 resale shop with Madewell, expanding internationally, breaking ground on a new distribution center in Texas, working with the costume designers of And Just Like That…—amazing progress in the battle toward a more sustainable future for fashion. You also saw a huge spike in demand after the pivot to remote work and the closet-cleanout trend. Do you see that momentum continuing in 2022?
Reinhart: When the pandemic hit, our homes became our office, gym, living space, and more. It altered consumer mindsets. There was not only a realization of how much stuff we have and how much of it we don’t need, but also a change in how we think about our clothing consumption and personal style. Consumers, especially younger generations like Gen Z, are rethinking their closets as reusable versus disposable and making conscious decisions to prolong the life of their wardrobes, including passing it on to another closet.
Q: You’ve got some formidable competition. What makes thredUP different?
Reinhart: thredUP is transforming resale with technology by making it easier and more convenient than ever to buy and sell secondhand. We’ve built a proprietary operating platform that delivers resale at scale through a managed marketplace—meaning we do the hard things so customers don’t have to. Sellers love thredUP because we make it easy to clean out their closets and unlock value for themselves or for the charity of their choice while doing good for the planet. Buyers love shopping value, premium, and luxury brands all in one place, at up to 90 percent off the estimated retail price.
Q: How will you grow brand awareness and market share in a crowded secondhand marketplace? More Upcycle partnerships/co-branded clean-out kits like the ones with Walmart, Gap, Madewell and Reformation? More Remade product lines? More “try-before-you-buy” Goody Boxes? All of the above?
Reinhart: In 2018, we extended our platform to brands and retailers to enable them to develop resale as a meaningful growth channel and deliver customizable, scalable resale experiences to their customers. As we continue to grow our brand awareness and market share, we’ll stay focused on building the best-in-class resale operating platform for both consumers and retailers. Beyond that, we’re expanding our business globally, finding new ways to educate and inspire consumers and brands, and working with policy makers to lessen fashion’s negative impact on our environment.
Q: As your business continues to scale, how do you keep it easy for consumers to use thredUP to sell their clothes and shop thousands of brands secondhand?
Reinhart: thredUP’s signature polka-dotted Clean Out Kit was our first innovation and remains one of our most important ones to this day. It holds up to 30 pounds of apparel, shoes, and accessories, and was designed to provide consumers with an easy and convenient way to get rid of the items they no longer want. As it has become easier to sell clothes online, our ability to take the supply of great products that sellers are putting into the market and make them available for resale keeps buyers coming back to us. We’ve processed more than 125 million unique secondhand items to date across more than 35,000 brands—from Gap to Gucci. Buyers can find items to match any style at any price point with a vast and ever-fresh selection that makes the experience fun and rewarding. As we scale, we’ll continue to delight sellers with the easy and convenient seller experience, and buyers with great brands at great prices.
Q: The sewn-in QR code is a brilliant idea! It ties into another revolutionary idea—that “consumers need to start thinking about what we’re going to do with products when we’re done with them,” as Babson Marketing Professor Lauren Beitelspacher put it so plainly. Will changing that consumer behavior and expansion of the circular economy play a big role in thredUP’s future mission and, if so, how will you do that?
Reinhart: thredUP’s mission is to inspire a new generation of consumers to think secondhand first. To bring that to life, we invest heavily in raising awareness around the benefits of circular practices like resale and educating consumers on how their purchasing behavior impacts our planet. We reduce waste and promote a circular model for fashion by reselling items through both our core marketplace and through our Resale-as-a-Service business, where we enable brands and retailers to deliver resale experiences to their customers. The more we can encourage reuse, the greater our impact will be.
Q: What percentage of your 2K+ employees are working remotely? How are you handling the back-to-work transition?
Reinhart: We’ve been grateful to safely continue operations in our distribution centers and have shifted to a remote-first culture in our corporate offices. The health and safety of all our employees—regardless of their individual work arrangement—has been and will continue to be our number one priority. We are continuously monitoring the data and reviewing recommendations from the CDC, WHO, and local government authorities to ensure that the actions we are taking are comprehensive and appropriate.
Q: How has COVID affected business continuity and your supply chain, including sellers, consumers, shippers, and partners?
Reinhart: 100% of thredUP’s inventory is domestically sourced from our seller network and we don’t rely on direct manufacturing, meaning all items on our site are in stock and ready to ship. We even chose to lower average prices in fall 2021 to engage as many consumers as possible who might have been dealing with the challenges of inflation and supply chain pressures.
Q: How did your undergrad years at BC shape your career path and contribute to your success with thredUP?
Reinhart: The breadth of the humanities curriculum was really impactful in shaping my world view. Taking perspectives and theology classes, history, english—all these experiences really increased my empathy for people, my empathy for the challenges we all face in the world. It ultimately made me a more compassionate leader and a more thoughtful team-builder. Building a company is really about assembling a team of people who are willing to go on a very uncertain journey!
Q: What does your destiny say about the entrepreneurial spirit, what lessons have you learned, and what advice do you have for the current crop of BC business students?
Reinhart: Something I think about a lot and find that most people overlook is the power of luck. My undergrad years set me up for success, but my career path today is much different than I imagined it would be when I was in college. thredUP’s success took a lot of hard work, but I know that certain circumstances throughout my life have happened based on luck and I can’t underestimate that. As for my advice: always keep the student mindset even after you graduate and never stop learning.