Online site for children's used clothes evolves

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HACKENSACK, N.J. -- Re-commerce -- online sales of secondhand clothes -- is changing the market for used children's apparel, according to a report released Thursday by thredUP, a San Francisco-based children's clothing resale website.

The year-old re-commerce site issued the first of what it intends to be an annual report that ranks the resale value of children's brands. The report found that the Gymboree brand has the highest resale value, followed by Baby Gap, Justice and Levi's. The Children's Place didn't score high in resale value, placing 21st on that list, but it was cited as a good resale value choice in the outerwear category.

The thredUP website, originally launched as a clothes swapping site in 2010, and switched to a re-commerce site at the beginning of 2012, is poised to profit from the $13 billion clothing resale industry. In its first year, 358,497 items were sold on thredUP, and consumers who mailed their used clothing to the site were paid $800,000. The website doesn't reveal its revenue, but because it pays consumers up to 40 percent of the value of their goods, they most likely were able to get close to $2 million in revenue for those goods.

"We're in the early stages of how this industry will move online," said James Reinhart, chief executive officer and co-founder of thredUP. "We want to try and position ourselves as a leader in that space."

The thredUP site lets users order prepaid shipping bags they can fill with used clothes and mail to thredUP. The website pays the senders for the clothes, either in the form of a credit for purchases on the site, or in a direct payment via PayPal.

The site was born, Reinhart said, when the founders saw that parents wanted to resell kids' clothes online but that "selling things by the piece online is really hard" for busy families. "We went out and observed customers and talked to them, and what they really wanted was to be able to just stuff it in a bag and be done with it," he said. "That's the model we built and it's proving to be pretty successful so far."