If Poshmark’s initial public offering is any indication, the fashion resale market is heading for a healthy future—and investors seem to have an appetite for standouts in the sector.
The peer-to-peer platform where consumers buy and sell clothing, shoes, accessories home goods and more closed its first day of trading at $101.50 on the Nasdaq exchange after shares priced at $42, a 141.7 percent spike, and well above its initial estimated range of $35 to $39 a share. The successful first day on the public markets values the nearly 10-year-old company at roughly $3 billion.
Shares began trading Thursday at $97.50, indicating strong demand for the Bay Area-based digital marketplace that facilitates the exchange of secondhand goods, whether shoppers sell or swap. Shares trade under the stock symbol “POSH” and at one point reached $104.98 apiece.
Millennials and Gen Z consumers have shown a growing interest in fashion resale, due in large part to their heightened awareness of environmental issues and other sustainability concerns.
In a regulatory filing, Poshmark posted profits of $21.8 million on revenues of $192.8 million for the first nine months of 2020. It boasted 4.5 million active sellers, 6.2 million active buyers and 31.7 million active users in its registration statement filed with the Securities and Exchange Commission. At the end of 2019, one in five people in America were the platform, it claims.
Born out of co-founder and CEO Manish Chandra’s garage in 2011, Poshmark has benefited from the ascendance of online shopping and the rise of younger demographics who have demonstrated greater interest in recycling goods, and in the circular economy that can prolong the life of their garments, footwear and other items.
The success of Poshmark’s IPO bodes well for the planned public offerings of German luxury e-commerce site Mytheresa.com and British footwear brand Dr. Martens.