Americans Are Buying More Used Clothes, but the Real Story Is Who’s Buying What: Luxury Resale Is Booming and so Is Discount

Why It Matters

The acceleration of resale captures market share from traditional retailers, reshaping profit dynamics and prompting brands to rethink distribution and sustainability strategies.

Key Takeaways

• Secondhand fashion sales rose 22% YoY in March.
• Luxury resale grew fivefold, outpacing overall apparel market.
• ThredUp revenue jumped 20% to $310 million in 2025.
• The RealReal saw 15% revenue increase, reaching $693 million.
• Gen Z accounts for 41% of resale sellers, up 16% YoY.

Pulse Analysis

The latest Bank of America Institute data reveals that the U.S. clothing market is bifurcating along income lines. While overall apparel spend rose modestly, the real engine of growth is the secondhand sector, which posted a 22% jump in March. This surge reflects consumers’ response to lingering inflation—clothing prices are up 3% year‑over‑year—and a broader desire for value. The K‑shaped recovery means higher‑earning households are channeling extra disposable income into luxury resale, whereas budget‑pressed shoppers gravitate toward discount thrift, amplifying polarization within the industry.

Resale platforms are converting that polarization into revenue. ThredUp reported a 20% revenue increase to $310 million, and its 2025 resale market grew four times faster than the broader apparel market. The RealReal, a specialist in high‑end pre‑owned goods, lifted revenue 15% to $693 million, capitalizing on demand for brands like Chanel and Gucci. Meanwhile, traditional department stores such as Kohl’s and Dillard’s face flat or declining sales, highlighting how the secondhand boom is eroding middle‑market share. The rapid expansion of luxury resale indicates that premium brands are no longer insulated from the thrift wave; they are becoming integral to the resale ecosystem.

Looking ahead, the dynamics of inflation, Gen Z participation, and sustainability will shape the resale landscape. Gen Z now represents 41% of sellers on resale platforms, a 16% YoY increase, suggesting that younger consumers view resale both as a shopping habit and a supplemental income source. Persistent price pressures and record‑low consumer sentiment reinforce the appeal of cost‑effective, circular fashion. Brands may need to develop official resale channels, partner with third‑party platforms, or integrate up‑cycling into their product lines to capture this shifting demand and mitigate the erosion of traditional retail margins.