OAKLAND, Calif. – ThredUp (NASDAQ:) Inc. (NASDAQ:TDUP, LTSE:TDUP), a major online resale platform for clothing and accessories, has divested its European arm, Remix, through a management buyout. The deal, led by Remix General Manager Florin Filote, was finalized as the agreement was signed. ThredUp maintains a minority stake in Remix and, before the transaction’s conclusion, provided Remix with a $2 million cash infusion to support its operations. According to InvestingPro data, ThredUp maintains impressive gross profit margins of 68%, despite operating with annual revenue of $314 million.

The divestiture is seen as a strategic move allowing ThredUp to concentrate on its primary U.S. market, while Remix will operate independently to grow within the European sector. Based on InvestingPro analysis, ThredUp appears undervalued in the current market, with analysts setting price targets between $2 and $3 per share. ThredUp CEO James Reinhart expressed confidence in Remix’s future success under Filote’s direction, emphasizing the focus on ThredUp’s innovation within the U.S. marketplace. Filote also shared enthusiasm for Remix’s new independent journey, aiming to enhance their customer experience and expand in Europe.

Details regarding the financial aspects of the transaction will be disclosed in a Current Report on Form 8-K to be filed with the Securities and Exchange Commission.

ThredUp, known for encouraging secondhand clothing purchases, operates a managed marketplace with over 200 million unique items processed from around 60,000 brands. The company’s platform supports various brands and retailers in offering resale experiences to customers, aligning with a sustainable fashion industry ethos. InvestingPro subscribers can access 10+ additional exclusive insights about ThredUp’s financial health, market position, and growth prospects through the comprehensive Pro Research Report, helping investors make more informed decisions.

The press release also contains forward-looking statements, which are not guarantees of future performance but rather predictions that are subject to risks and uncertainties. These statements outline expectations for ThredUp’s operations and strategic focus post-divestiture and discuss potential technological advancements and market trends. The company’s SEC filings, available on its Investor Relations website or the SEC’s website, provide further details on factors that could influence ThredUp’s business outcomes.

This news is based on a press release statement from ThredUp.

In other recent news, ThredUp reported a strong financial performance for the third quarter of 2024, exceeding expectations and revising its forecasts upward for the fourth quarter and the full year. The company’s Gross Merchandise Value (GMV) experienced a 7% year-over-year increase, reaching $457 million, largely driven by gains in new buyer acquisition and retention. ThredUp is pivoting towards the U.S. market, transitioning to a consignment model that now accounts for over 90% of its revenue. Despite a decrease in consolidated revenue and active U.S. buyers, the company’s gross margin has improved, and innovative AI features are expected to boost customer engagement and sales growth.

ThredUp is divesting its European business, with a management buyout targeted by year-end. The company’s adjusted EBITDA has been positive for five consecutive quarters, with U.S. cash flow positivity anticipated for the full year. The fourth-quarter U.S. revenue outlook has been raised to between $58 million and $60 million, with full-year projections of $250.8 million to $252.8 million.

These are the recent developments, and ThredUp expects to continue its progress into 2025, projecting positive free cash flow and EBITDA margins similar to 2024. The company’s focus is on enhancing the U.S. business post-EU divestiture, with investments in operational infrastructure and AI innovations aimed at improving buyer acquisition and retention.

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