ThredUp Inc., one of the largest online resale platforms for women's and children's clothing, shoes, and accessories, has entered into a definitive agreement to acquire one of the European resale company Remix Global.
ThredUP's expansion goals in Europe would be aided by the acquisition since the secondhand market in Europe was predicted to be worth 21 billion dollars in 2020 and is expected to reach 39 billion dollars by 2025. The announcement follows ThredUP's strong domestic growth and development of its Resale-as-a-Service (Raas) business, which includes new partnerships with Vera Bradley, Farfetch, LG, and Madewell.
Remix has created special ‘single-SKU’ logistics that can effectively handle millions of unique clothes, similar to ThredUP's own proprietary operating platform. ThredUP gains a complementing operational infrastructure and an experienced management team with this purchase, which will help it expand throughout Europe.
To accelerate its marketplace growth, ThredUP aims to invest in Remix's product offerings, processing infrastructure, and go-to-market strategy. Under the ThredUP banner, Remix will function as a separate business unit managed by CEO Lyubomir Klenov. ThredUP's European expansion will be led by Klenov, while the company expands its footprint in other key markets.
ThredUP may be able to expand its RaaS platform beyond the United States as a result of the Remix acquisition, allowing brands and retailers to provide personalized resale experiences to their customers throughout Europe. ThredUP's RaaS platform is already used by a number of the world's most well-known brands and retailers to power their resale channels, and the company's entry into Europe offers up new opportunities for future development.
James Reinhart, co-founder, and CEO of ThredUP, said that Lyubomir and his team have developed a solid, lean, customer-first business, and they know how to provide resale efficiently across multiple markets in Europe. They believe there is a huge opportunity in the European resale market, and they are ecstatic to have the opportunity to leverage Remix's technology and operational skills to help accelerate its growth.
Klenov added that they've long respected ThredUP's leadership in the United States and their devotion to developing a mission-driven firm that makes it easy to purchase and sell secondhand. He thinks that by working together, they can expand on Remix's core operating engine, technology, and logistics to offer that scalable experience to the European market, where resale is just getting started.
The agreement is scheduled to conclude in the fourth quarter of 2021, subject to normal and deal-specific closing conditions. The acquisition price is estimated to be around $28.5 million, subject to usual purchase price modifications and closing costs. Remix's management team will also get 6.5 million dollars in restricted stock units to vest over four years from ThredUP.
ThredUP expects the acquisition to be accretive to total revenue, dilutive to gross margin, and modestly accretive to adjusted EBITDA in the near term. Total revenue for Remix in the calendar year 2020 was 33.9 million dollars, and ThredUP expects the acquisition to be accretive to total revenue, dilutive to gross margin, and modestly accretive to adjusted EBITDA in the near term.
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