Quick Facts
- The U.S. secondhand apparel market grew 14% in 2024, outpacing the broader retail clothing market by 5X
- Department stores’ closet share is expected to drop to 7% in 2029, down from 22% two decades earlier
- Consumers plan to spend 34% of their apparel budget on secondhand in the next 12 months
Department stores are losing market share to resale retailers as the secondhand clothing market continues its rapid expansion, according to a Bank of America Securities report.
The U.S. secondhand apparel market grew 14% in 2024, seeing its strongest annual growth since 2021. Online resale platforms drove much of this growth, expanding 23% and accounting for 88% of resale spending in the U.S.
“Rather than cannibalizing sales from each other, data points to off-price and secondhand apparel retailers both gaining share from department stores, with off-price emerging as the real winner,” said Bank of America analyst Lorraine Hutchinson.
ThredUP reported revenue jumped 20% last year to $310 million. The company found the secondhand market grew four times faster than the broader clothing market in 2025.
“Resale is no longer just growing, it’s taking direct market share,” said James Reinhart, ThredUp cofounder and CEO.
Department stores continue struggling with declining sales. Kohl’s sales dropped 4% in fiscal 2025, with another 2% decline predicted for the coming year. Dillard’s total sales remained flat year-over-year.
The data shows department stores’ share of consumers’ closets will shrink to 7% in 2029, down from 22% two decades earlier. Online market shares for Macy’s and Nordstrom stand at 1% and less than 0.5% respectively, both declining.
Economic pressures drive the shift toward secondhand shopping. High inflation has particularly affected American wallets, with the annual consumer inflation rate rising to 3.3% in March from 2.4% in February.
Younger consumers lead the resale trend. Gen Z and Millennials plan to spend nearly half (46%) of their apparel budgets on secondhand items, compared to the overall average of 34%.
Leading resale platforms ThredUp, Poshmark, and The RealReal collectively hold around 50% of the market. These companies use data-driven platforms, strategic brand partnerships, and AI-driven pricing algorithms to compete effectively.
The U.S. resale market could reach nearly $79 billion by 2030, with online resale forecast to grow 16% annually and reach $34 billion by 2027.
