H&M is launching a resale platform with ThredUp Inc., as global apparel companies try to make a dent in the clothing waste they produce and seize on a potential new source of revenue.

H&M is No. 11 in the Europe Database, Digital Commerce 360’s ranking of the region’s largest online retailers by web sales.

H&M’s resale market will launch immediately

The retailer will start its first resale platform in the U.S. market, H&M Pre-Loved, on March 14. The launch includes 30,000 items of used women’s and kids’ clothing and accessories on hm.thredup.com. The Swedish apparel company is the largest retailer to sell used clothing and accessories via ThredUp’s resale platform. ThredUp already works with several dozen other brands and has launched resale programs with J. Crew and Kate Spade in 2023.

“We need to take responsibility for the impact fashion has on climate and the environment,” Abigail Kammerzell, head of sustainability for H&M North America, said in a statement. Business models such as this can help “reduce and limit this negative impact, while continuing to deliver fashion and style for our customers,” she said.

In February, H&M announced a program to sort used clothing in Europe for resale and recycling.

Customer demand is unclear

It’s too soon to say whether resale programs will ultimately lead firms to produce less clothing because of declining demand for new goods.

Digital Commerce 360 asked customers about these preferences in a September 2022 poll of 1,064 shoppers. 13% said that they had purchased a previously owned product from an online consignment seller. 14% said they had made purchases based on a retailer’s sustainability policies. About one-third of respondents said they never used these services and had no plans to in the next year.

For companies such as H&M, it can be easier and less costly to use the existing technology and logistics of resale platforms powered by ThredUp and its competitors, rather than creating a service on their own. “Resale-as-a-service” is a source of revenue for ThredUp in addition to what it earns selling used items on its own marketplace website. ThredUp doesn’t disclose how much revenue it generates selling through its business model.

H&M didn’t reveal its forecast for potential revenue from the sale of its used items. Many companies that have launched resale platforms recently have said that initial revenue is likely to be minimal but that it will grow over time as the market expands.

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