Lululemon, a Vancouver-based brand specializing in athletic and leisurewear, has ventured into the resale market, aligning with the trend where second-hand shopping transitions from traditional thrift stores and online platforms to brands’ own systems. This move follows similar strategies adopted by notable companies like Canada Goose and Arc’teryx in reimagining their stance on pre-owned garments.
A notable development in this shift is the establishment of a 25,000-square-foot processing center in Calgary by Tersus Solutions, a Denver-headquartered company. This facility is responsible for cleaning, grading, and preparing returned Lululemon items for resale as part of the brand’s ‘Like New’ initiative. Notably, this marks Tersus’ first Canadian facility, handling not only returns but also facilitating the resale of used Lululemon products nationwide.
The allure of the resale market for brands lies in the opportunity to salvage products that would typically be discarded, thereby fostering customer loyalty by offering credit for future purchases. This model benefits consumers by providing access to newer items at reduced prices while championing sustainability efforts. Lululemon recently introduced its Like New program in Canada, enabling customers to buy and sell pre-owned Lululemon apparel through an online platform.
According to the program’s FAQ section, customers stand to receive either 70% of the sale price in cash or 90% in store credit. To list an item for sale, individuals must provide a proof of purchase receipt, although some items may qualify for trade-in even without this documentation, as outlined on the Like New website. Lululemon opted not to provide an interview, with Maureen Erickson, the brand’s senior vice president of retail experience, emphasizing the program’s role in extending the lifespan of their products.
At the Calgary facility operated by Tersus Solutions, garments undergo thorough inspection, cleaning utilizing a proprietary liquid CO2 system, refurbishment, and grading. Despite the current focus on processing returned items for resale, the facility has experienced a remarkable volume of orders, handling between 1,000 to 1,500 items daily, surpassing initial expectations.
Peter Whitcomb, CEO of Tersus Solutions, highlighted the substantial growth of their U.S. business over the past five years, attributing it to brands seeking avenues to recuperate value from returned and pre-owned merchandise. Working with renowned brands such as New Balance, the North Face, and Arc’teryx in the U.S., Tersus intends to expand its operations in Canada.
Retail analyst David Ian Gray noted the rising popularity of second-hand markets among retailers, emphasizing the potential for brands to tap into this segment where their products are already circulating. He cited the DIG360/Angus Reid Institute study, revealing that 77% of Canadians engaged in purchasing pre-owned items in the previous year. By integrating resale under their brand, retailers can attract new customers seeking affordable alternatives while diversifying their product offerings.
Early advocates of resale, like Victoria-based Anián, have successfully launched their own marketplace for customers to resell their products, emphasizing sustainability from fabric sourcing to post-consumer sales. Similarly, IKEA Canada initiated its Sell-back program in 2019, witnessing a notable response from customers returning items for store credit without compromising the brand’s premium positioning.
Gray emphasized that embracing resale does not equate to devaluing a premium brand but rather presents an opportunity to cater to a broader consumer base at varying price points. It’s a strategic move that aligns with evolving consumer preferences and sustainability goals across the retail landscape.