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Walmart is selling used clothes in its latest attempt to become a fashion retailer

Marc Bain
A woman wears a Coach bag

As the biggest retailer in the US, Walmart is also one of the country’s largest sellers of clothing, much of it low-cost basics it peddles at its nearly 5,000 brick-and-mortar stores. But for some time the company has also been trying to make a name for itself selling more design-driven items, especially online.

It hasn’t gone great. After buying two buzzy, digitally native clothing companies in 2017—Bonobos and Modcloth—and acquiring another, Eloquii, in 2018, it struggled to make them profitable. Last year it sold Modcloth and laid off dozens of Bonobos employees just months before its founder, Andy Dunn, announced he would leave the company.

Still, Walmart hasn’t given up its ambition to be a bigger fashion retailer, and its latest effort takes a different approach. Instead of new clothes, it’s selling used.

Walmart today launched a site selling pre-owned women’s and children’s clothing, accessories, footwear, and handbags in partnership with Thredup, one of a crop of used-fashion sellers online. Thredup gets its inventory from members sending in clothes they no longer want. It pays for items it can sell and donates the rest. The company has even developed a plug-and-play option for other retailers to sell used clothes.

The deal gives Walmart access to the fast-growing market for fashion resale, which is expected to thrive in a post-pandemic world. It also lets Walmart fill out its fashion e-commerce with products from companies such as Coach, Michael Kors, Zara, and many others it might not otherwise have access to, at prices mostly accessible to a mass-market audience.

A yellow dress and accessories such as a bag and clothes lie flat on a bed

Pre-loved.

Walmart has made a priority of building out its brand roster as it works to offer customers a greater mix of items. It already sells a ton of groceries, a notoriously low-margin category, but has strived to get shoppers buying more products with higher margins, too, namely fashion and home goods. “And that means that we needed to continue to add brands,” Marc Lore, Walmart’s ecommerce chief, explained on a May 19 call with investors and analysts. He said Walmart had done well lately adding new names to its assortment, including Champion, Keds, Ray-Ban, and more.

In its announcement today, Walmart noted it had added “nearly 1,000 brands” to its online assortment. Denise Incandela, head of fashion for Walmart US ecommerce, said in the release the new tie up would add even more labels at mass-market prices. “This partnership is our latest move to establish Walmart.com as a destination for fashion,” she stated.

The used offering includes nearly 750,000 items. There are pieces such as a $335 cocktail dress by 3.1 Phillip Lim, but many more costing less than $50 from companies including J.Crew, Ann Taylor, H&M, and more. It’s unclear if Walmart’s margins on used clothing will be comparable to what it earns on sales of new clothes. We have reached out to the company for comment and will update this story with any reply.

Thredup, meanwhile, gets the largest retailer in the US as partner. It has previously made similar deals with department stores JC Penney and Macy’s. Neither has apparently turned resale into a major part of its business, but it’s had its benefits. Earlier this year, Macy’s noted the small in-store shops where it sells used items from Thredup have been effective at bringing in a younger generation of shoppers.

 

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