Welcome back to cheddar, everyone thread up an online
consignment and thrift store where people can buy and sell
secondhand clothing, reporting a beat on both the top
and bottom lines and its Q. Three earnings report
and taking a look at shares of T. D
. U. P. Approaching a high of$24
after the news. But then pulling back below$20
today still Shares up over just 2% during today's session
. And we spoke with the company's Ceo James Reinhart
about what investors should take away from the latest quarterly
results. Take a look. I think it shows
continued momentum in our business. You know on a
top line basis continue to see strong sales, strong
engagement from existing buyers and new customers and then the
business continuing to leverage on the bottom line. And
so I think speaks to you know sort of the
ongoing advantages that we have in our supply chain and
the competitive advantages and you know we think it's a
great opportunity for us to continue to do what we're
doing in a statement, you said quote supply continues
to appear endless. Can you elaborate that on on
that a little bit and why your company, I
would assume have an advantage on nutritional retail currently dealing
with these widespread supply chain woes. Yeah look I
mean the way threat up is is built is to
make it super convenient for for anybody to clean out
their closets. So we send you a prepaid bank
, you fill it up, you send us all
the things you're no longer wearing and so you know
that is something that people have been doing for years
with us and the service is super convenient and so
people keep doing it and you know the nice thing
then is that we can take that supply, put
it online. And in a world where most consumers
are feeling squeezed by prices and seeing apparel shortages everything
we have on threat up is is 100% in stock
ready to ship. And so I think it speaks
to you know real opportunity for resale and for a
company like threat up during the holiday season and into
2022. Yeah. And you know in this traditional
in a in the traditional retail environment, it certainly
appears that you have the advantage here when we're dealing
globalization issues and supply chain issues import issues. You
know, your company has that advantage you mentioned prices
. So I want to elaborate on that a little
bit because it's an interesting interesting strategy, especially in
this current kind of economic environment. Your company is
lowering prices to attract customers who are you know paying
more for other goods of course due to inflation.
Can you talk about how much you're reducing prices?
Um and then how many customers you hope to attract
? And this is a long term strategy may be
to build in loyalty or just to build in recognition
to the company? Yeah, I mean we we
we noted that prices are down 15% in Q3 over
Q3 last year. Um and yeah, as you
said, like we know that the consumer is feeling
the pressure. You know, whether it's at the
palm boards at the grocery store. Um and so
we were we felt like there was an opportunity here
to take advantage of the fact that our supply chain
and our products are totally Resource here in the US
um provides some price relief. And I do think
that customers are coming to the platform at higher numbers
. We're definitely seeing that kind of elasticity prove out
. And so while I think it's something that we've
done in Q3 will do in the holiday season,
I think it I think it's more about 2022 and
how throwing up can be the best place for you
to shop and we like to say great great brands
at great prices in a sustainable way. I'm really
trying to keep to that mission. How with that
discount kind of model, how many customers are you
projected to bring in as a result? Um You
know, I don't think we're disclosing the exact numbers
, but I think what the way we're thinking about
it is if we can increase conversion relative to how
marketing costs tend to rise in Q. Four.
We think ultimately that's a great trade off because we
know once customers come on to throw it up and
start shopping uh they shop at higher rates and they
stick around, You know revenue from our existing customers
has always been north of 80%. I mean,
so we know more customers compounds revenue over time.
Holiday season of course has to be a big quarter
for you guys, you know, coming up,
can you just talk about, you know, demand
that you're seeing with the upcoming holiday season? And
I go back to that question with traditional retail,
given the supply chain issues inflation we're seeing in traditional
retail. Are you seeing demand just increase for a
company? Uh, and an option like yours in
this holiday season environment? Yeah, I mean interestingly
enough resale doesn't tend to be, you know,
a high performer right around kind of the gift buying
peak months black friday into december because so far,
uh gift giving, um, you know, used
hasn't made the step to being used for gifts.
But having said that, I do think one of
the interesting tail winds this holiday season will be the
fact that, You know, everything is in stock
and ready to ship. Uh, and our prices
are so competitive and so, um, so I
do think we may have a leg up, you
know, on a, on a relative basis,
uh, to apparel retailers that are dealing with these
supply chain challenges. But I think more importantly,
um, you know, we're thinking about how,
how does this roll into 2022, which is certainly
something that, that were quite positive about. Yeah
, that strategy certainly is a longer term strategy.
It appears that they will have to wait and see
how it actually unfolds here. Um want to talk
to you about threat of also recently announcing this new
the newest distribution center in texas, saying that it
will more than double capacity. When will the center
be fully operational? Yes, so the center will
come online in Q two of 2022. So that
will be when we first start processing uh and then
sales should come online and if you too early part
of Q three. And yes, it's our largest
facility to date, it'll hold 10 million Unique items
at scale, which will take our total network from
6.5 million items to 16 and a half million items
. So it's a big expansion of processing capacity,
you know, ultimately I think will help us capture
more of the resale market and it's a market that's
growing rapidly. Um and we're excited to be in
a position to capture more of it over time.
Yeah, you certainly feel like the tail ones going
in obviously deal with inflation, but even sustainability,
that being a growing concern and consciousness on the consumer
side, before I let you go really quickly here
, you just talk about some initiatives your company looking
to accomplish over the next couple of months ahead.
And are you looking to expand your presence globally?
Yeah, so we we announced uh in early october
that we had acquired Remix, which is a company
in europe leading resale company. We're very excited about
how they help expand our portfolio into europe. We
think it's a great team with a great opportunity.
We also recently announced a minority investment in a company
called Vivo Pero, which is based in latin America
. And so again, really trying to focus on
being a global resale leader and leveraging all of our
expertise across operations and technology and logistics, uh,
to bring resale two more corners of the world.
Um, and I think it suggests that threat up
is going to continue the momentum that we have and
, you know, excited to do that in other
parts of the world. Thank you again to James
Reinhart Ceo of threat up for joining us here on
cheddar news.