Online Clothing Thrift Store ThredUp Opens First Retail Location

ThredUp's James Reinhart


Online clothing thrift store ThredUp is opening retail locations to complement its online presence, a significant strategic shift for a company that had been online-only since its founding eight years ago.

The first store, San Francisco-based ThredUp announced today, is opening in San Marcos, Texas, a city of 60,000 people on the Interstate 35 corridor between Austin and San Antonio. The company said that it plans to open four additional locations by year-end. A second store is already in the works in affluent Walnut Creek, Calif., ThredUp cofounder and CEO James Reinhart told Forbes.

Reinhart says he chose San Marcos as the company’s first location because of the city’s successful Tanger Outlet, where the store will be located. “One of my hypotheses is that the ThredUp customer shops a lot at outlets,” he said. The demographics of Walnut Creek, a city in the East Bay area about 20 minutes from San Francisco, are more affluent and suburban, and that store will offer more designer brands and more handbags. Subsequent stores, in locations that Reinhart declined to identify, also will be tailored to local demographics. All of the new stores will incorporate technology that will allow ThredUp to stock its stores with items more likely to sell to customers in that area, as well as to nudge consumers to purchase more online to complete an outfit or to swap out a shoe in the wrong size with one that fits.

“The vast majority of our business will be online,” Reinhart said. “The store serves a set of customers we can’t serve online. It makes sense as a growth strategy.”

Back in 2009, Reinhart, Chris Homer and Oliver Lubin founded ThredUp as an online marketplace for second-hand clothing, with a big focus on kids. It has expanded rapidly since then, as a place to buy women’s clothes from mass brands like J. Crew, Banana Republic, Michael Kors and Club Monaco. That expansion has been helped by more than $125 million in venture funding from investors that include Goldman Sachs Investment Partners, Highland Capital Partners and Trinity Ventures. In 2015, Forbes named ThredUp – which at the time had revenue of $19 million – to its list of America’s Most Promising Companies. Forbes estimates that ThredUp’s revenues will top $100 million this year.