Clothes from females wardrobe on shelf of second hand store. Womans hand holding craft paper tag with inscription second hand. Circular fashion, eco friendly shopping, thrift stores concept
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Tomorrow, July 1, is the drop-dead date set by California’s Responsible Textile Recovery Act (SB 707) for fashion and textile brands to register with the state’s approved Producer Responsibility Organization (Landbell USA). This is the nation’s first Extended Producer Responsibility law for apparel and textiles—modeled after similar European EPR laws. It holds producers accountable for the end-of-life management of their products, with Landbell tasked with building and operating a system for collection, repair, reuse and recycling.
For years, fashion brands have been pulled into the circular resale market by consumer demand for responsible environmental practices. But the SB 707 act is the final push to accelerate circular practices nationwide—virtually every fashion brand generating $1 million or more in California sales falls under its purview.
While the law places additional administrative burdens on companies—they must start tracking fiber content, materials and volume of goods sold in California—it will push more companies to get serious about the fashion resale market, which is already on fire. The secondhand fashion market grew four-times faster in the U.S. than the primary retail market—up 13% compared to 3.6% respectively last year, according to ThredUp.
Ready, Set, Go
At the same time, the added regulatory requirements and the complexities around producers’ end-to-end product responsibilities are likely to increase prices in the primary market over time, making the appeal of resale even more compelling to consumers—Bain’s Global Consumer Lab finds the sweet spot for secondhand fashion prices is 30% to 70% off the original price.
And on the other side, ThredUp finds that too many fashion brands lag in executing a viable resale presence. “While most brands recognize resale as strategically necessary, few are equipped to scale, creating a gap between intent and capability,” it reports.
The California regulatory initiative arrives at the perfect moment to supercharge the fashion resale market, turning compliance pressure into a competitive advantage.
According to ThredUp’s survey among fashion retailers, nearly 60% agree that lacking a resale presence creates a permanent structural disadvantage.
ThredUp reports that the global fashion resale market will grow from $257 billion in 2025 to $289 billion in 2026, a 12% increase and reach $393 billion by 2030, on a CAGR ~9%.
The U.S. market makes up only about 20% of the global resale market and based on current estimates it will grow slower than the rest of the world, based upon a 7.3% CAGR through 2030.
European And U.S. Consensus
Now in its 14th edition, ThredUp has established itself as the authority in the U.S. resale market with large-scale, annual U.S. consumer surveys conducted by GlobalData, but it misses the European perspective, which is just about as large as the U.S. resale market and has been on the forefront of EPR legislation.
Bain’s new study, “Charting the Rise of Preowned Apparel In the U.S. and Europe,” begins to fill the European gap. It is based upon research among 1,500 American consumers and the same number in U.K, France and Germany to total 4,500 European consumers.
While ThredUp reports higher resale engagement overall, with 59% of U.S. consumers purchasing secondhand fashion last year versus 42% in Bain’s study, Bain broadens the field by reporting 48% of U.K. consumers, 45% in France and 37% in Germany were active in the resale market.
Despite the differences in U.S. resale participation rates—which are no doubt a function of different survey methodologies—both firms come to the same conclusions.
“Secondhand is becoming mainstream,” said Joëlle de Montgolfier, executive vice president global retail and luxury practices at Bain & Company. And ThredUp founder and CEO James Reinhart added, “Secondhand has moved well beyond the early adopter phase.”
Both surveys also confirm that young generations are leading the resale charge. Bain finds 55% of Gen Z and 49% of millennials in the U.S. purchased preowned apparel or accessories in the past year, with a similar higher incidence in Europe. And in the U.S., ThredUp finds that a remarkable 58% of Gen Z start their shopping journey in resale before buying new.
While all consumers are drawn to resale to stretch their fashion budgets, Bain finds that among preowned customers, lower-income consumers—defined as those earning less than $50,000/€25,000/£25,000—paradoxically are not the most likely to buy secondhand, except for baby boomers.
ThredUp suggests that part of the reason those with middle-to-higher incomes are more active in the resale market is that they participate full-circle in resale: buying and selling. Some 60% of U.S. resale consumers consider the potential resale value when buying something new and more than half of resale shoppers have resold items from their closet in the past year.
“We’re moving from a linear apparel economy toward a resale flywheel, where consumers increasingly buy with future value in mind,” Reinhart explained.
Across The Pond Differences
The key difference between the U.S. resale market and that in Europe is how people shop. In the U.S., Americans are much more active buying in-store (78%) than through an online platform (46%), like ThredUp, Poshmark or The RealReal. In Europe, the numbers are reversed: 72% buy online—Vinted, Depop, eBay and Vestiaire Collective are prominent platforms there— and 45% buy in store.
Racks of clothing for sale in Goodwill store, Denver, North Carolina. (Photo by: Lindsey Nicholson/UCG/Universal Images Group via Getty Images)
UCG/Universal Images Group via Getty Images
While there are nearly 20,000 consignment shops in the U.S. where people can earn a bit of spending money from their castoffs, there is a well-developed brick-and-mortar resale infrastructure here led by Goodwill and Salvation Army, which rely on charitable donations.
Yet both firms see significant runway for online platforms in the U.S. Bain’s de Montgolfier said, “While most secondhand still happens in-store in the U.S., online resale platforms are growing fast and we expect the shift to online to accelerate.”
ThredUp’s Reinhart concurs. “Our report forecasts the U.S. online resale market will nearly double to $48.3 billion by 2030, reflecting what we believe is a long-term shift in how people buy and sell apparel.”
SB 707 Will Power Brands’ Resale Shift
As fashion brands adapt to the new EPR regulatory environment in California, which will reverberate throughout the nationwide supply chain, many will face significant headwinds to reach full compliance. Fortunately, they have until 2030 before major noncompliance penalties kick in.
But in the meantime, many are unprepared. ThredUp finds only 16% of companies are ready to scale resale immediately with 38% citing logistics and operational gaps as reasons preventing scale. Third-party/RaaS (Resale-as-a-Service) partners, like ThredUp, Archive and Trove, are ready to help brands overcome the logistical and operational resale gaps.
However, there is a bright side to the short term challenges EPR regulations bring. “The compliance framing around SB 707 misses the business opportunity story,” shared Alon Rotem, chief strategy officer at ThredUp. “Brands that get ahead of EPR aren’t just managing a new cost line—they’re discovering a customer relationship they didn’t have before.”
He cites data from ThredUp survey finding 60% of Gen Z and millennial shoppers say that integrated fashion resale, where brands build resale into the business model, directly increases their trust in a brand.
“That’s the part compliance teams don’t model: resale isn’t the end of the transaction—it’s a reason to stay in the customer’s life long after the first sale,” he concluded.