ThredUp quit Europe three years after buying Remix for $28M, having put in over $20M

On its Q2 2024 earnings call, ThredUp announced it would exit Europe and explore strategic alternatives for Bulgaria-based Remix, the secondhand apparel company it bought in 2021 for around $28 million. Retail Dive reported that the company had put over $20 million in cash into Europe over six quarters. Europe revenue fell 18% year over year and its adjusted EBITDA margin was negative 23%, 'despite significant attention from our U.S. team,' said CEO James Reinhart.

ThredUp acknowledged that Europe had been dragging on profitability and said it expected to present US-only operating results by Q3. Wedbush analysts called the decision to pull the plug 'probably a good idea.' The company would either sell or write down the European business. It had named a general manager for Europe in May, and Reinhart had then said it had more than doubled European revenue since 2021.

In the same quarter ThredUp reversed a customer-acquisition test. It had changed new-buyer offers from a percentage discount to a dollar discount in the middle of the first quarter, and the change backfired. ThredUp estimated it lost about 90,000 potential customers and took a $3 million hit in Q2. It reverted on June 1 and reported an immediate recovery.

ThredUp's European business lost money and shrank even after it invested heavily and put US staff attention on it.

The company said its European efforts 'struggled'; Retail Dive reported it could not make Europe work.

The new-buyer discount change lost customers and showed ThredUp's growth experiments were also faltering.

Buying a platform to enter a region does not make it profitable; the US team's attention and over $20M in cash were not enough to fix the economics.

Remix was to become a stand-alone company led by its general manager Florin Filote, and ThredUp explored strategic alternatives for it. ThredUp's total Q2 2024 revenue was $79.8 million, down 3.5%, with a net loss of $14 million. It launched AI shopping tools the same week.