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.

Over $20M cash in six quarters; Europe revenue down 18% and a -23% adjusted EBITDA margin in Q2 2024; an abandoned discount test cost $3M.

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.