Baker Retail Rundown

Resale Retail Thrives Amid Tariff Increases

While traditional retailers are struggling with tariffs and increased costs—80% anticipating disruptions—, resale companies such as ThredUp and GoodwillFinds are finding success. With 60% of shoppers expecting higher apparel prices, many are turning to more affordable secondhand options. Proposed legislation, such as the Americas Act, could further boost the resale sector with tax incentives, mirroring successful European policies. The impact is already visible: ThredUp saw nearly 10% revenue growth in late 2024, GoodwillFinds is expanding operations, and The RealReal saw a 14% revenue increase. To sustain momentum, resale firms are investing in AI, with The RealReal deploying Athena to refine item attribution and enhance customer experience. These technological investments combined with the economic factors favoring secondhand fashion are positioning the industry for substantial growth in the coming years. 

Mytheresa’s Profits Soar Ahead of Its YNAP Acquisition

The German luxury ecommerce retailer MyTheresa saw sales grow 13 percent to €223 million ($230 million) in the second quarter of its fiscal year that ended in December, as it awaits regulatory approval to acquire its competitor Yoox-Net-a-Porter. Mytheresa is planning to rename its parent company, MYT Netherlands Parent B.V., to LuxExperience once the deal closes, and its ticker on the New York Stock Exchange will be changed to “LUXE.” The company’s flagship site, Mytheresa, will keep its name. MyTheresa’s average order value rose 10% in this second quarter as it increased sales in higher ticket categories like fine jewellery. Through this merger with YNAP, MyTheresa expects to generate €4 billion in revenue by 2029. MyTheresa has already begun preparing for the integration, hiring new technology staff to transition Net-a-Porter onto its existing in-house software platform.

Target to bring Warby Parker shops to certain stores in effort to drive sales

Direct-to-consumer eyewear brand Warby Parker is partnering with Target to bring their affordable eyewear into 5 Target stores across the US. This is Warby Parker’s first partnership with a retailer, as they have historically only sold their products directly to the consumer through their website and stores. The new Warby Parker shop-in-shop will offer products like glasses, sunglasses, and contacts, as well as services like eye exams and vision tests. This new partnership is part of an effort to meet consumers where they are and introduce new consumers who may not be familiar with Warby Parker. Warby Parker currently operates 275 stores as compared to Target’s almost 2000 locations. The five Target stores that will be hosting this new shop-in-shop are in Willowbrook, IL, Bloomington, MN, Brick, NJ, Columbus, OH, and Exton, PA.

US Tariffs: the End of Shein and Temu?

The Trump administration’s announcement to impose 10-25% tariffs on imports from China, Mexico, and Canada has sent shockwaves through U.S. markets, hitting companies that rely heavily on outsourced production— from e.l.f. Beauty to Calvin Klein and Boot Barn. While premium brands like Canada Goose and Aritzia are also among the most vulnerable to the new tariffs, they may have the pricing power and brand equity to absorb and pass these costs onto consumers. E-commerce giants like Shein and Temu however, have models which depend on razor-thin margins and price-sensitive shoppers. Compounding the pressure, the administration is also ending the “de minimis” trade loophole, which previously allowed shipments under $800 to enter the U.S. duty-free. Without this exemption, Shein and Temu will face major cost increases, fundamentally disrupting their value proposition to American consumers. As these discount marketplaces scramble to adjust, domestic competitors like Wamart, Amazon, and Dollar tree stand to gain market share. With rising import costs reshaping retail, this could mark the beginning of the end for Shein and Temu in the U.S. 

Retail Revival: Retail Investment Boom Projected to continue in 2025

According to JLL’s Q4 retail market dynamics report, investment in the retail sector increased 36% from the first half of 2024, reaching $21.2 billion. This also boosted total retail investment volume to $36.8 billion, marking a 6% year-over-year increase. Spurred by interest rate cuts and positive sector headwinds, the increase in retail investment is expected to carry over from 2024 into 2025, where the industry is projected to experience even more growth. Some great investment opportunities include convenience and luxury spaces in grocery spaces, as well as urban retail. A recent report captured the 8.3% increase in the average deal size in the retail sector last year, reaching a whopping $20.2million. ““Value-add opportunities for larger-box, trophy power centers or malls are expected to continue to be attractive to well-capitalized investors capitalizing on the ongoing recovery in consumer demand for these retail formats,” concluded the report.