Why "Sustainable Fashion" Always Fails

Summary

近年、環境に優しいファッション業界は急速に成長しましたが、実際には持続可能性と利益性の間には溝が存在します。この業界は、古くなった服をオンラインで販売し、新しい消費者に提供することで、リサイクル文化を促進していますが、IPOを行った企業の株価は大きく下落傾向にあります。特に、レントラルウェイやザ・リールリール、ポッシュマーク、スレッドアップなどの企業は、顧客満足度の低さや高額なマーケティング費用、在庫の管理コストなどによって、利益を上げることができませんでした。一方で、オールバードのような企業は環境に優しい素材を使用して製品を製造し、ESG企業として知られるようになりましたが、高額な製品価格とマーケティング費用のために、株価は大きく下落しました。消費者が実際に環境に配慮するかどうかは疑問であり、市場は依然として安価で大量のファッションを求め続けています。

Takeaways

• 🔄 **循环时尚的兴起**：近年来，所谓的循环时尚和可持续时尚初创公司公开上市，总共筹集了数十亿美元。循环时尚允许人们在线将旧衣物卖给新消费者，而可持续时尚指的是由可生物降解材料制成的衣物，其碳足迹比普通衣物小。
• 📉 **IPO的失败**：尽管这些公司上市时受到华尔街的热捧，但它们的股票表现却是灾难性的。五家纯可持续时尚公司自IPO以来股价下跌了57%至95%。
• 💸 **投资者资金的重新分配**：由于利率接近零，投资者在2021年将资金投入亏损的循环时尚公司。然而，随着美联储提高利率，国债现在提供了高达5.5%的收益，这改变了投资者的资金流向。
• 👗 **Rent the Runway的商业模式**：Rent the Runway成立于2009年，提供服装租赁服务，消费者可以按月支付一定费用来租赁多件服装。尽管理论上听起来高效，但实际上存在清洁、磨损和修复成本高昂的问题。
• 📈 **收入增长与亏损**：尽管Rent the Runway的收入在2021年恢复增长，并且2022年超过了疫情前的水平，但公司从未实现盈利，其单位经济效益显示，营销和一般管理成本过高。
• 🛍️ **The RealReal的挑战**：The RealReal是一个电子商务平台，允许人们买卖二手奢侈品。它面临的主要问题是奢侈品容易被仿冒，因此需要昂贵的鉴定过程，这导致它向卖家收取高额佣金，尽管如此，公司仍在亏损。
• 🛒 **Poshmark和ThredUp的比较**：Poshmark和ThredUp都是在线二手服装买卖平台，但它们的商业模式不同。Poshmark是一个点对点平台，而ThredUp则拥有大型仓库来处理、拍照和列出衣物。Poshmark的资产轻模式使其有更高的贡献利润率，但高客户流失率导致其必须不断进行市场营销。
• 📲 **技术与运营成本**：Poshmark和ThredUp都需要在技术和运营上投入资金，包括维护网站、客户服务和仓库管理。这些成本对于它们的盈利能力至关重要。
• 📊 **Allbirds的ESG策略**：鞋类品牌Allbirds尝试在其制造过程中融入环境可持续性，使用环保材料制作鞋子。尽管它试图将自己定位为对环境负责的公司，但其股票自上市以来表现不佳，股价下跌了95%。
• 💰 **营销成本与客户流失**：Allbirds和其他可持续时尚公司一样，需要在营销上花费巨资以吸引和保留客户。然而，高昂的营销成本和客户流失率导致它们难以实现盈利。
• 🌐 **消费者行为与市场现实**：尽管媒体炒作和一些消费者声称关心环境，但实际上很少有消费者愿意为环保支付高价。市场最终会供应消费者真正想要的产品——便宜且数量大的衣物，而不考虑环境影响。

Q & A

最近数年間で、どのようなエコロジー志向のファッションスタートアップが注目されていますか？

最近数年間で、循環型ファッションと持続可能なファッションのスタートアップが注目されています。循環型ファッションとは、人々が古い衣服をオンラインで新しい消費者に販売するものです。持続可能なファッションは、バイオデgradable材料で作られ、通常の衣服よりも小規模なカーボンフットプリントを持つ衣服を指します。

ファストファッション業界の環境への影響として、どのような問題が指摘されていますか？

ファストファッション業界は、衣服が非常に安価になり、人々がその衣服を大量に購入することで、数百万トンの使用済みの衣服が最終的に廃棄物処理場に流れ込む問題があります。これにより、環境への影響が大きくなり、批判の的となっています。

Wall Streetが循環型ファッション業界をどのように評価していますか？

Wall Streetは、循環型ファッション業界を次の大きな事象と位置づけ、IPOを通じて多くの持続可能なファッション企業を公表していますが、それらのIPOは例外なく失敗を喫していました。

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トレンドのランウェイという企業のビジネスモデルとは何ですか？

トレンドのランウェイは、2009年に設立された企業で、大規模な倉庫を持ち、何千もの衣服を所持しています。消費者は月額94から193ドルを支払い、同時に5から15アイテムの衣服にアクセスすることができます。ウェブサイトから選択し、必要な時に自宅に配送されます。

トレンドのランウェイはなぜ利益を上げるのに苦労していますか？

トレンドのランウェイは、衣服のクリーニング、修繕、配送などのコストが高く、顧客満足度が低く、悪質な広告などによる顧客の不満が報告されています。また、売上の31％を満たすために、マーケティングと一般管理費を削減する余裕がありません。

リアルレアルとはどのような企業ですか？

リアルレアルは、高級ブランドの古着を購入・販売できる電子商取引プラットフォームです。彼らのメインセールスポイントは、プラットフォームで販売されるすべてのアイテムが専門家によって認証されることです。

ポッシュマークとスレッドアップはどのような違いがありますか？

ポッシュマークは、eBayのようなピアツーピアの電子商取引プラットフォームで、個人が古着を売却することができます。一方、スレッドアップは、古着を集めるための大きな倉庫を持っており、衣服を並べ替え、ウェブサイトで販売します。

ポッシュマークはなぜ顧客満足度の低さに苦しんでいますか？

ポッシュマークはピアツーピアプラットフォームであり、売手の品質や信頼性を警察するのが非常に困難です。そのため、購入者の経験が悪く、顧客満足度が低くなっています。

スレッドアップはなぜ利益を上げるのに苦労していますか？

スレッドアップは、倉庫維持費が高く、売却する各アイテムの利益が小さく、倉庫費用をカバーするには十分ではありません。また、売手からは手数料が高いと不満があり、多くのアイテムが説明なしに消えると感じています。

オールバードという企業は持続可能な素材を使用した靴作りにどのような課題に直面していますか？

オールバードは、環境に優しい素材を使用することで高価格の靴を提供していますが、売上の増加に伴い、損失も増大しています。また、彼らのマーケティング費用は非常に高く、売上の40％近くをマーケティングに費やしています。

消費者が実際に環境問題についてどれだけ関心を持っているのかを示す最もいい方法とは何ですか？

消費者が実際に環境問題にどれだけ関心を持っているかを知る最もいい方法は、アンケートや市場調査を行うことです。ただし、実際には人々が環境への関心を示すために高価格で見栄えの悪い靴を購入する人は非常に少なく、人々は安価で大量の衣服を求めることになるでしょう。

Outlines

00:00

🔄 循环时尚与可持续时尚的兴起与挑战

近年来，所谓的循环时尚和可持续时尚初创公司公开上市，筹集了数十亿美元的资金。循环时尚允许人们在线将旧衣物出售给新消费者，而可持续时尚指的是由可生物降解材料制成、碳足迹较小的衣物。快时尚产业因其环境影响受到越来越多的批评。年轻一代消费者更加关心环境问题，因此能够减少浪费的服装公司有望获得市场份额。然而，这些公司的首次公开募股（IPO）表现糟糕，股价普遍下跌。视频将深入探讨循环时尚，分析为何盈利能力和可持续性可能是互斥的。

05:02

📉 Rent the Runway和The RealReal的商业模式与困境

Rent the Runway和The RealReal是两家尝试解决昂贵衣物常被闲置问题的公司。Rent the Runway提供服装租赁服务，而The RealReal是一个奢侈品二手商品买卖平台。尽管理论上这些模式听起来高效，但实际操作中存在许多问题，如高昂的干洗和修补成本，以及客户服务质量问题。两家公司都面临财务困境，Rent the Runway上市后股价下跌严重，而The RealReal则因为鉴定成本高昂而难以盈利。

10:03

🛍️ Poshmark和ThredUp的P2P与集中式循环时尚模式

Poshmark和ThredUp是两家面向大众市场的循环时尚公司，它们允许个人买卖二手衣物。Poshmark类似于eBay的P2P电商平台，而ThredUp则提供从收集、分类到销售的一站式服务。Poshmark的商业模式较轻，主要费用为运营应用、市场营销和客户服务。ThredUp则因为其重资产模式，需要处理大量的物流和库存，导致其利润较低。两家公司都面临客户流失问题，需要不断投入市场营销以吸引新客户。Poshmark最终被韩国搜索引擎公司Naver收购，而ThredUp则因客户评价不佳和高昂的费用而受到批评。

15:04

🌿 Allbirds的环保制造与市场表现

Allbirds是一家尝试将环境可持续性融入其制造过程的品牌。其鞋子使用环保材料制成，虽然价格昂贵，但公司希望消费者愿意为支持环境而支付高价。Allbirds在风险投资的支持下迅速增长，并在公开市场上市，尽管从未盈利。由于其营销成本高昂，公司的运营亏损每年都在增加。随着增长放缓，投资者开始抛售股票，导致股价大幅下跌。尽管有环保意识的消费者存在，但大多数人在购买衣物时还是更看重价格和数量，而不是环境影响。

Keywords

💡持続可能なファッション

持続可能なファッションとは、環境への影響を最小限に抑えるためのファッション業界の取り組みを指します。この動画では、生物分解性のある資材を使用して作られる衣服や、通常の服よりも二酸化炭素排出量が少ないという特徴が説明されています。持続可能なファッションは、若い世代の消費者が環境問題に注目し始めた背景下で、市場シェアを獲得する可能性があるとされています。

💡サークルファッション

サークルファッションは、人々が自分の古着をオンラインで新しい消費者に販売できるビジネスモデルを指します。動画では、サークルファッションがどのようにして売手が古着を捨てずに売却し、買手が名品服を割引価格で手に入れ、さらに古着が埋立地に捨てられることを減らせるという双赢の手法であるかについて説明されています。

💡ファストファッション

ファストファッションは、安価で大量生産される衣服を指し、環境への影響で批判されています。動画では、ファストファッション産業が、衣服が非常に安価で消費者が大量に購入するため、数百万トンの古着が埋立地に捨てられる問題を引き起こしていると述べています。

💡リントザルーウェイ

リントザルーウェイは、2009年に設立された企業で、消費者が月額料金を支払って多数の服を借りることができるサービスを提供しています。動画では、リントザルーウェイが所有していない衣服を借りるというビジネスモデルが理論上は効率的であるが、実際には清潔や修理などのコストがかかる問題があると指摘されています。

💡ザ・レアルリアル

ザ・レアルリアルは、高級ブランドの古着やアクセサリーを購入・販売できる電子商取引プラットフォームです。動画では、ザ・レアルリアルが偽造品のリスクに対処するために、専門家による商品認証プロセスを設けていることが説明されていますが、そのプロセスの高コストが問題となっています。

💡ポッシュマーク

ポッシュマークは、個人間取引の電子商取引プラットフォームで、eBayと似ています。動画では、ポッシュマークがアセット軽量のビジネスモデルを採用しており、売上の20％をマーケティングに費やしていることが触れられており、顧客満足度の低さから新たな顧客を獲得し続ける必要があると指摘されています。

💡スレッドアップ

スレッドアップは、古着を購入・販売できるオンラインプラットフォームで、大量の倉庫を持っているというアセット重視のビジネスモデルを採用しています。動画では、スレッドアップが販売価格の15～80％を売却者に支払うと説明されており、売上の大部分を倉庫の運営コストに充てているため、マーケティングやオーバーヘッドコストをカバーするのが難しいと指摘されています。

💡オールバード

オールバードは、環境に優しい素材で靴を製造するシューズ会社で、環境永続性に力を入れているとされています。動画では、オールバードが環境に優しい素材を使用することで高価な製品を提供し、環境への関心を示す消費者に訴求しているが、その高価格が売上の悪化につながっていると述べています。

💡環境永続性

環境永続性とは、製品やサービスが環境に与える影響を最小限に抑える取り組みです。動画では、消費者が環境永続性について聞かれると関心を持つと答えるかもしれないが、実際には安価で大量の商品を求めることが多いと指摘されています。

💡B型企业

B型企业とは、利益だけでなく社会的、環境的な影響も重視する企業です。動画では、オールバードがB型企业として認められており、そのステータスを投資家にアピールしているが、株価が下落していることを示して、環境永続性の取り組みだけでは株主の価値を最大化できないことを示しています。

💡マーケティング費用

マーケティング費用とは、製品やサービスを宣伝するために企業が費やす資金です。動画では、持続可能なファッション企業がマーケティング費用を大幅に削減することができない理由として、顧客満足度の低さから離れる顧客を置き換える必要があることが挙げられています。

Highlights

近年来，所谓的循环时尚和可持续时尚初创公司公开上市，总共筹集了数十亿美元。

循环时尚允许人们在线将旧衣物出售给新消费者，而可持续时尚指的是由可生物降解材料制成的衣物，其碳足迹比普通衣物小。

快时尚产业因其环境影响而受到越来越多的批评，廉价衣物导致数百万公吨的旧衣物最终被填埋。

年轻一代消费者更关心环境问题，能够减少浪费的服装公司有望获得市场份额。

循环时尚看似双赢，卖家可以从旧衣物中获得一些钱，而不是扔掉它们；买家可以以更低的价格获得名牌衣物，且减少衣物被填埋。

华尔街迅速将该行业炒作为下一个大事件，为多家可持续时尚公司公开上市铺平了道路。

然而，这些IPO无一例外都是灾难，五家纯玩可持续时尚公司的股价自IPO以来下跌了57%至95%。

亏损的循环时尚公司之所以能够在2021年上市，是因为利率接近零，投资者没有更好的资金去向。

Rent the Runway是第一家认真尝试解决昂贵衣物闲置问题，通过订阅服务模式提供服装租赁。

Rent the Runway的商业模式在理论上听起来很棒，但在实践中存在一些主要问题，如干洗和修补衣物的成本高昂。

Rent the Runway在疫情期间销售大幅下降，尽管疫情消退后收入逐渐恢复，但公司从未实现盈利。

The RealReal是一个电子商务平台，允许人们买卖奢侈品牌二手商品，其主要卖点是严格的商品认证过程。

Poshmark和Thredup是两家面向大众市场的循环时尚公司，它们的商业模式不同，Poshmark更侧重于P2P交易，而Thredup则提供更多的服务。

Poshmark的资产轻模式理论上可以使它们非常盈利，但实际上需要大量营销支出来维持客户。

Thredup的资产重模式导致其贡献利润较低，且由于二手衣物利润微薄，无法覆盖其庞大的仓库费用。

Allbirds等品牌尝试将环境可持续性融入其制造过程中，使用环保材料制作产品，但高昂的成本和市场接受度是其面临的挑战。

Allbirds作为一家公开上市的ESG公司，尽管其股价自IPO以来下跌了95%，但其对环保的承诺和认证B公司的地位吸引了投资者和消费者。

尽管媒体炒作，但大多数消费者实际上并不关心环境可持续性，他们更愿意购买便宜且数量大的衣物，而不是昂贵的环保品牌。

Transcripts

over the past few years a number of

so-called circular fashion and

sustainable fashion startups have gone

public raising billions of dollars in

aggregate circular fashion is where

people can sell their old clothing to

new consumers online sustainable fashion

refers to clothes that are made from

biodegradable materials which have a

smaller carbon footprint than normal

clothes in recent years the fast fashion

industry has been the subject of

increasing criticism due to its

environmental impact clothes are now so

cheap and people buy so much of it that

millions of tons of used clothes end up

in landfills with the younger

generations of consumers caring more

about environmental issues clothing

companies that can cut down on waste

should be well positioned to gain market

share circular fashion seems like a

win-win sellers get some money from

their old clothes instead of throwing

them away buyers get name brand clothes

for a fraction of the near price and

less clothes end up in landfills Wall

Street wasted little time in hyping up

the industry as the next big thing

Paving the way for a number of

sustainable fashion companies to go

public over the past few years years

however without exception these IPOs

have been complete disasters of the five

Pure Play sustainable fashion companies

their share prices have declined between

57 and 95 since their IPOs one of the

five companies Poshmark was acquired

last October for 57 less than its IPO

price which was just one year prior of

the four sustainable fashion companies

that remain publicly traded today they

have all suffered share price declines a

Nexus of 80 percent in this video we'll

take a deep dive into circular fashion

and see why profitability and

sustainability may be mutually exclusive

a big reason why money losing circular

fashion companies were able to go public

in 2021 was because interest rates were

near zero so investors had nowhere

better to park their cash but thanks to

the fed's rate hikes this is no longer

the case treasury bonds now offer yields

as high as five and a half percent which

is backed by the full faith and credit

of the US government and thanks to

today's video sponsor public buying

treasury bonds has never been easier in

the past you would either have to go to

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below

there are three main types of

sustainable fashion firstly there's

circular luxury secondly there's

circular Mass market and finally their

sustainable manufacturing we'll look at

each of these three business models in

order the idea of circular fashion seems

to make a lot of sense at first for

example a bride might spend thousands of

dollars on a wedding dress which they

wear only one time this is clearly a

massive waste of money Beyond special

occasions like weddings a lot of people

buy expensive clothes but then get bored

of them so they end up sitting in the

wardrobe 90 of the time doing nothing

the first company which seriously

attempted to address this problem was

Rent the Runway founded in 2009 they

have a massive Warehouse with hundreds

of thousands of pieces of clothing

consumers can pay between 94 and 193

dollars per month to get access to

between 5 and 15 articles of clothing at

a time you choose to close from their

website and they're delivered to your

door whenever you get bored of the

clothes you can mail it back to them and

get a new one this should be much more

efficient than buying clothes because

the clothes are never sitting in a

wardrobe doing nothing as soon as you're

done with the clothes they can be sent

back for someone else to wear while rent

the runway's business model sounds great

in theory there are a few major problems

in practice each time an article of

clothing is returned it must be dry

clean which is a costly process also

clothes experience wear and tear over

time Rent the Runway employs large

numbers of seamstresses who make repairs

to the clothing on a regular basis

read the runway sales plummeted during

the pandemic with people staying at home

there is less demand for designer

clothes as a pandemic subsided their

revenue gradually recovered in 2021 they

ipo'd and used the proceeds to ramp up

their marketing budget in 2022 they

finally surpassed their pre-coveted

revenue despite the strong Revenue

growth retina Runway has never been

profitable we can look at their unit

economics for 2022 for every 100 of

Revenue they generated they spent 31 on

fulfillment this includes shipping the

products to and from the customer's

house as well as cleaning and repairing

the clothes they spent 19 on technology

which includes operating the website and

various other software that they use to

keep track of their massive inventory

they spent 28 on the cost of the clothes

themselves eventually the clothes are so

worn out that they need to be thrown

away and replaced and finally they had

six dollars of depreciation in

amortization this leaves them with a

contribution profit of 16 that is not

enough to cover their marketing in

general and administrative costs so the

company reported an operating loss when

a company has a positive contribution

profit they could theoretically become

profitable by increasing their revenue

hopefully their overhead costs and

marketing will decrease as a percentage

of Revenue but it doesn't look like this

is in the cards for Rent the Runway Rent

the Runway has extremely bad customer

reviews with just 1.4 out of 5 stars on

trustpilot people complain of the closer

of poor quality and excessively worn out

consumers also complain about deceptive

advertising they signed up for Rent the

Runway after seeing online

advertisements which show high quality

clothes when they actually start using

the platform the clothes on the

advertisements are not available

resolving these customer complaints

would require expanding their warehouses

holding more inventory and replacing

worn out clothes faster improving the

customer experience would cost money

that Rent the Runway doesn't have as

they're already losing money as is Rent

the Runway has failed as a business

within just two years of going public

look the share price has declined by 94

percent with a share price of 98 cents

and a market cap of just 66 million

dollars it is squarely within penny

stock territory and will likely go

bankrupt the core problem for Rent the

Runway is that they have to ship dry

clean and repair the clothes on a near

weekly basis which is a massive expense

secondly there's an incentive problem

when people own their clothes they're

more likely to take care of them so they

can last a long time if you're just

going to send the clothes back next week

There's far less incentive to take care

of them this creates a situation where

the quality is subpar and customer churn

is high this requires the company to

spend exorbitantly on marketing to

replace lost customers which has thus

far prevented them from ever turning a

profit

the next circular Luxury company is the

real real founded just a couple years

after Rent the Runway it also aimed to

solve the problem of old designer

clothes sitting in people's wardrobes

doing nothing the real real is an

e-commerce platform which allows people

to buy and sell luxury apparel and other

accessories you can buy second-hand

luxury goods from Top designers like

Gucci Louis Vuitton and Prada at up to

90 off the original retail price the

main problem with secondhand luxury

goods is that there's a massive

incentive to counterfeit it can be very

difficult to tell the difference between

a well-made fake and the real thing the

real real has massive authentication

centers where every single item sold on

a platform must first go to to be

authenticated by an expert this is their

main selling point and why the name of

the company is real real there have been

incidents of fake products slipping

through the cracks but overall real real

does a pretty good job of verifying the

authenticity and customer reviews are

generally positive the problem is this

process is extremely expensive they have

to hire hundreds of authenticators to

look at every single item because of

this they are forced to charge

exorbitant commission fees to sellers on

the platform if you send real real a

product that they sell for 99 you'll

only get nineteen dollars there's a

sliding scale where the commission is

lower the more valuable the item is but

even at the top bracket they will still

take a 30 commission despite these

massive fees real real is still losing

huge amounts of money in 2022 for each

one hundred dollars of Revenue they

generated they incurred forty two

dollars for cost of Revenue cost of

Revenue consists mainly of shipping

costs and payment processing fees they

spend a further 46 dollars on operations

and technology which mostly consists of

their authentication centers this leaves

them with just 12 dollars of

contribution profit which is nowhere

close to covering their marketing and

overhead costs since its IPO in 2019 the

real real share price has declined by 91

as investors have completely lost faith

in their supposed paths or profitability

the idea of an online Marketplace for

second-hand clothing makes sense in

theory it just doesn't work for luxury

items because the cost of authentication

is prohibitively high but what about for

cheaper clothes that wouldn't even be

worth counterfeiting would secondhand

e-commerce work there

in 2021 two mass-market circular fashion

companies went public Poshmark ipo'd at

a three billion valuation and thread up

iPod at 1.3 billion valuation both

companies saw their share prices surge

on the first day of trading as investors

were hyped about the circular fashion

opportunity Poshmark is a peer-to-peer

e-commerce platform very similar to eBay

if you have old clothes you want to sell

you can take pictures of them and list

them on the Poshmark app you set your

own price and can negotiate with the

buyer the buyer pays for shipping you

print out a prepaid shipping label and

send it off to the buyer's address

Poshmark takes a 20 fee on the sale

price of each item the main bold case of

Poshmark is that it has an asset light

business model they don't have any

warehouses and never take physical

delivery of any inventory in theory this

could make them very profitable as their

only expenses are operating the app

marketing and customer service

thredup is also an online platform to

buy and sell second-hand clothing if you

have a lot of clothing that you don't

use anymore thredup can send you a large

bag where you put all of your clothes

and send it over to them thredup has

massive warehouses where they sort

through all the clothes photograph them

and list them for sale on their website

when your items sell you receive 15 to

80 percent of the value based on the

item price the max payoff percentages

for items that sell for 200 or more

thread up charges higher fees to sellers

than Poshmark this is to be expected

given that they have thousands of

employees at their warehouses Poshmark

and thredup Target two different types

of customers Poshmark sellers are

willing to put in the time to list the

product themselves in an effort to

receive the highest possible price for

their used clothing thread up sellers

are willing to receive worse prices for

their clothes in exchange for the

convenience of thredup handling the

listing and fulfillment the third

quarter of 2022 was poshmark's last as a

publicly traded company so we'll use

this to judge their unit economics for

every 100 of Revenue they brought in

Seventeen dollars went to the cost of

Revenue this includes Payment Processing

fees and the cost of operating their

website Poshmark takes a 20 Commission

of the gross merchandise value and

that's what they recognize as net

revenue but they have to pay Payment

Processing fees on the entire value a

further eighteen dollars went to

operations and support which primarily

consists of customer support

representatives and the like one dollar

goes to depreciation and amortization

this leaves them with sixty four dollars

of contribution profit for every one

hundred dollars of Revenue that's a

pretty good margin but by construction

asset light businesses like Poshmark

always have high contribution margins

the real question is how much it costs

to keep customers on the platform one

thing to note is that Poshmark spends a

lot of money on marketing almost half of

their revenue the reason they have to

spend so much on marketing is their High

customer churn the company has horrible

customer reviews with just 1.3 stars out

of 5 on trustpilot the main complaint is

that sellers are often unresponsive and

the products are often in far worst

condition than their photos would lead

you to believe because Poshmark is a

peer-to-peer platform it is very

difficult to police the quality and

trustworthiness of the sellers this

makes for a poor buyer experience

Poshmark needs to constantly spend on

marketing to replace lost customers this

is never a sustainable strategy because

eventually you run out of new customers

to market to in October of 2022 the

South Korean search engine company Naver

acquired Poshmark for 17.90 per share

representing an all-cash consideration

of 1.2 billion dollars why they wanted

to buy a money losing business on the

other side of the world with a 1.3 star

trust pilot rating is beyond me but it

allowed poshmark's investors to cash out

albeit for a 57 loss compared to their

IPO price less than two years prior

given the asset heavy nature of

thredup's business model their

contribution margin is far lower than

poshmarks for every 100 of net revenue

they spend 33 dollars on outbound

shipping and 48 on sorting photographing

and listing the products on their

platform this leaves them with only

nineteen dollars of contribution profit

which is not nearly enough to cover

their marketing and overhead costs the

marketing expense is necessary to bring

in new customers to replace the

customers who leave the platform

threadup's customer reviews are almost

as bad as poshmarks with just 1.6 out of

5 stars on trustpilot while most of

poshmark's complaints come from Liars

most of thredup's complaints come from

sellers sellers complain about the

exorbitant fees that thread up charges

as well as the fact that many of the

items that they send in simply disappear

without explanation the problem with

thredup is that the second hand clothes

are just too cheap the amount of profit

that they make from selling each item is

too small to cover their massive

Warehouse expenses this has caused them

to cut Corners leading to a poor seller

experience games unsurprisingly

thredup's share prices lost 83 percent

of its value since its IPO

if circular fashion doesn't work how

else can a business benefit from

consumer interest in environmentalism

some Brands including the shoe company

all birds have tried to incorporate

environmental sustainability into their

manufacturing process the tops of

Albert's shoes are made from wool the

sole is made from sugarcane the laces

are made from recycled plastic this

gives them a significantly lower carbon

footprint than normal shears which are

typically made from polyester or nylon

mesh from the outset all birds tried to

position itself to investors as an

environmentally responsible ESG company

they proudly boasted their status as a

certified B Corporation B certification

is given out by a non-profit

organization called B lab which judges

companies based on their ESG

characteristics all birds further claims

that their commitment to ESG has turned

them into a thought leader which will

presumably boost their sales from

environmentally conscious consumers they

brag that as a certified B Corporation

they do not aim purely to maximize

shareholder value instead they have a

vague mission of prioritizing positive

outcomes for all stakeholders they made

good on their promise to neglect

shareholder value as the share price has

declined by 95 percent since the company

went public so why is all birds

performed so disastrously all birds goes

out of its way to make its shoes out of

environmentally sustainable materials

which are far more expensive because of

this Albert's shoes are very expensive

with the cheapest men's shoes costing

over one hundred dollars per pair the

thinking is that people will be willing

to pay these high prices because it

shows their support for the environment

all birds has always been generously

funded by Venture capitalists who bought

into the idea of sustainable fashion in

their first year in the business in 2016

they secured a 7 million dollar series a

funding round they consumed cash

voraciously and by 2020 they were

already onto their series e-funding

round where they raised another 100

million dollars they use the Venture

Capital money to spend exorbitant

amounts of money on marketing every year

they spend close to 40 percent of their

gross profit on marketing this massive

marketing expense has allowed them to

grow their revenue when Alberts went

public they tried to position themselves

as a thought leaders among

environmentally conscious consumers

these consumers would flock to buy all

birds shoes as a way to publicly show

their environmentalism because of this

the stock price surged 90 on the first

day of trading giving the company a four

billion valuation despite the fact that

they had never turned a profit the

problem is the more Alberts grew their

revenue the more money they lost in

every single year their operating losses

have been greater than the prior year

this indicates that their revenue growth

was not the result of being a thought

leader but instead the result of an

unsustainably expensive marketing

campaign throughout 2022 they were

burning through their IPO money at an

alarming rate by 2023 their cash

position was getting uncomfortable and

they pulled back on their marketing

budget this caused their sales to drop

by 11 in the first half of the Year by

positioning themselves as a growth stock

Alberts was able to achieve a premium

valuation despite the losses but the

knife Cuts both ways as their Revenue

growth decelerated and then turned

negative growth investors dumped the

stock and the share prices declined by

95 since the IPO

despite the media hype very few

consumers actually care about

environmental sustainability when asked

in a survey people might say they care

about the environment because it costs

nothing to take a box but very few

people are willing to spend 100 on an

ugly pair of shoes just because the

brand claims to have a lower carbon

footprint at the end of the day people

want cheap clothes and massive

quantities regardless of environmental

impact and as long as that's what they

want that's what the market will supply

alright guys that wraps it up for this

video what do you think about

sustainable fashion let us know in the

comments section below as always thank

you so much for watching and we'll see

you in the next one Wall Street

Millennial signing out