ThredUp has agreed to acquire Bulgaria-based secondhand apparel company Remix Global AD for $28.5 million, plus $6.5 million in restricted stock units that will vest over four years, the company said Monday.
Like ThredUp, Remix runs a consumer-facing site and has also developed efficient systems, which ThredUp in a press release compared to its own operating platform. The deal is expected to close in the fourth quarter, subject to customary conditions.
Remix will operate as an independent business unit under the ThredUp umbrella, led by Remix CEO Lyubomir Klenov, who will also lead ThredUp's European expansion, according to the release.
Amazon isn't the only retailer with a lucrative side gig. ThredUp is making a name for itself not just as a used clothing e-retailer but also as a logistical services provider for other retailers hoping to take part in the expanding resale market.
As ThredUp noted in its release Monday, its tie-up with Remix comes after it clinched deals to provide Vera Bradley, Farfetch, LG, and Madewell with its resale service logistics. Thredup announced its most extensive deal last week with Madewell. All told the company says it "has processed over 125 million unique secondhand items from 35,000 brands across 100 categories" since the 2018 launch of its resale services unit.
With extensive sales throughout Europe already in place at Remix, the deal is a logical move for ThredUp, which made its expansion ambitions clear on Monday. Remix "has built custom 'single-SKU' logistics that can process millions of unique garments efficiently," and ThredUp "plans to invest in Remix's product offerings, processing infrastructure, and go-to-market strategy to accelerate its marketplace growth," per the release.
The rising popularity of clothing resale — which ThredUp and GlobalData estimate will be a $77 billion market in five years, its growth outpacing the wider apparel sector eleven-fold — is a global phenomenon. Artisan marketplace Etsy last month ponied up $1.6 billion for U.K. secondhand apparel marketplace Depop, which has some 30 million registered users across about 150 countries. In Europe alone, ThredUp estimates that secondhand sales reached $21 billion last year will reach $39 billion by 2025. Remix took a good bite of that last year, with $33.9 million in sales.
"We're bullish about the massive opportunity in the European resale market and are thrilled about the chance to build on Remix's technology and operational expertise to help accelerate its growth," ThredUp Co-founder and CEO James Reinhart said in a statement.
ThredUp said it "expects the acquisition to be accretive to its total revenue, dilutive to its gross margin and modestly accretive to its Adjusted EBITDA in the near term."