The online marketplace is looking to ride the resale boom.
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Poshmark, an online marketplace for secondhand clothing, on Thursday filed for an initial public offering with U.S. regulators, hoping to ride a surge of interest in IPOs now that the company has become profitable.
Founded in 2011, Poshmark reported that revenue in the first nine months of 2020 rose 28% to $192.8 million. But perhaps more crucially, as it looks to entice investors to buy its stock, the company earned $8 million in profit after a sizable loss in the same period last year.
Earlier this fall, Poshmark rival ThredUp confidentially filed for an IPO. The RealReal, a competitor focused solely on the luxury market, went public in mid-2019, though its shares are below its IPO price, and the company is currently unprofitable.
All three are leaders in the so-called re-commerce market, which has soared as younger shoppers develop a taste for vintage and secondhand items amid a backlash against the wastefulness of the apparel sector and the need to save money in a tough economy.
A study earlier this year, conducted by independent research firm GlobalData and commissioned by ThredUp, found that the U.S. resale market would hit $36 billion by 2024, compared with $7 billion last year. The idea has caught on to such a degree that some well-established companies, including Levi Strauss, are jumping in with their own resale programs.
Poshmark recently launched features to bolster spending by its customers and increase how frequently they shop. Those include its Just Picked feature, which uses artificial intelligence to scan listings (there were 201 million items listed as of the end of its last quarter) and personalize suggestions to customers on what they should buy. Also new is Dropping Soon, which allows sellers to market their listings ahead of when they’ll be on sale in order to build buzz.
Poshmark had 31.7 million active users as of September, primarily young shoppers who are millennials or members of Gen Z.
“Three key trends are driving the future of retail: the shift to online, the shift to social, and the shift to secondhand. Many of these trends are led by younger generations who continue to grow their spending power as they age,” Poshmark said in its IPO filing.
It plans to list shares on Nasdaq under the ticker POSH.
The U.S. stock market has seen a record number of IPO filings this year, with investors looking to take advantage of a soaring stock market to cash in on their investments. New stocks that have soared recently include those of DoorDash and Airbnb. But not all IPOs see a so-called first-day pop. The distinction for worst first-day performance goes to Wish, an online marketplace, whose shares plummeted 16% on their first day of trading this week.
