Walmart Inc. announced that it has entered into a partnership with online fashion platform thredUP in a move which is targeted to give the retail giant a foothold in the resale market.
ThredUP is a resale platform for fashion and accessories at mass market prices. The partnership will provide Walmart customers access to 750,000 pre-owned items across women’s and children’s clothing, accessories, footwear and handbags. Second-hand retail items from brands Calvin Klein, Nike to Coach and Michael Kors, are sold on the platform.
Walmart said it will offer free shipping on orders of $35 or more and free returns to Walmart stores or thredUP. The financial terms of the partnership weren’t disclosed.
“We know that customers, especially millennials, are interested in shopping resale clothing,” said Denise Incandela, Head of Fashion at Walmart U.S. e-commerce.
ThredUP’s upcoming 2020 annual resale report is expected to show that 70% of consumers have bought or are now willing to buy second-hand retail items.
Walmart is venturing into the fashion market at a time when consumers will probably be looking to buy cheaper products as the economic repercussions of the coronavirus pandemic hurt their pockets. Stay-at-home mandates during the pandemic crisis have seen consumers change their habits and do much of their shopping online. Last week, Walmart reported that its U.S. e-commerce sales surged 74% in the first three months of the year.
Shares in Walmart jumped 20% over the past two months and were trading at $123.86 as of Tuesday’s close.
Last week, five-star analyst Scot Ciccarelli at RBC Capital raised Walmart’s price target to $132 from $129, while maintaining a Hold rating on the stock.
Ciccarelli said that although Walmart stands to be a “net winner” in the expected recessionary or slow recovery scenario he believes that incremental profitability flow should be limited due to higher expenses tied to COVID-19.
Turning now to the rest of the Street, analysts are overall more bullish on Walmart. The stock scores 21 Buys out of 26 ratings with the rest assigning a Hold, which adds up to a Strong Buy consensus. The $136.43 average price target implies 10% upside potential in the shares over the coming year.