H&M's secondhand clothing platform Sellpy has been around for 12 years and employs 2,700 people, yet it has still not turned a profit; H&M Group's resale business accounted for less than 1% of its revenue last year, but its CEO calls the business a window into understanding the secondhand market.

Key Points

  • Sellpy was founded in 2014, and H&M became its largest shareholder in 2015, currently holding 82%.
  • Sellpy charges sellers €1.20 per item plus a commission of up to 60% of the sale price, but it remains loss-making with no clear timeline for profitability.
  • Europe's secondhand clothing market has doubled in size over the past five years to $290 billion, growing at more than twice the rate of the overall apparel market.

Doing Secondhand While Carrying Inventory

Inside Sellpy's large distribution center north of Stockholm, the space is packed with secondhand dresses, trousers, tops, shoes, and handbags, with the occasional phone or laptop mixed in. According to Bloomberg Businessweek, more than 20 million items moved through this warehouse and three other facilities in Europe last year.

Unlike competitors such as Depop and Vinted, Sellpy handles everything after the seller ships the item: sellers send in unwanted items in a bag costing about €3, and the platform takes care of authentication, inspection, photography, writing descriptions, pricing, and storage, then ships the item once it sells—a heavy lift for goods that may not fetch $5.

CEO Michael Arnör's startup idea came from his childhood room overflowing with unused items. He co-founded Sellpy in 2014 with two friends, and H&M took a stake the following year to become its largest shareholder. The platform charges sellers €1.20 per item and takes a commission of up to 60% of the sale price. But 12 years on, with a workforce of 2,700, Sellpy is still losing money, and its path to profitability remains unclear.

Sellpy is not alone in this struggle. Paris-based luxury resale platform Vestiaire Collective had gross merchandise volume of just under €1 billion in 2025 and expects to reach only slight profitability this year—15 years after its founding; ThredUp, which is listed in the U.S. and has a business model similar to Sellpy's, has never been profitable since it was founded 17 years ago. Europe's largest secondhand fashion platform, Vinted, facilitated €10.8 billion in merchandise transactions last year, with revenue of €1.1 billion, up 38% year over year. Its model leaves photography, pricing, storage, and logistics to sellers and charges buyers only about 5%, yet even it only became profitable in 2023, 15 years after founding.

Can AI Untie the Cost Knot?

Arnör hopes to break through the bottleneck with artificial intelligence: Sellpy uses AI to extract information such as brand, size, material, color, and pattern from photos, automatically generate short product descriptions, and set prices. Arnör says the technology can improve both quality and efficiency at the same time. Still, manual steps cannot be eliminated—opening mailer bags, checking pockets, carefully inspecting garments for holes and flaws, and preparing them for photography all still require people.

The business model itself is also not easy to fix with AI or hard work. A dress or coat listed on Vinted stays with the seller until it sells, and the platform bears no cost; Sellpy, by contrast, must handle and photograph items itself and hold inventory. Sara Rosengren, a professor at the Stockholm School of Economics, points out that the Vinted model requires less investment and carries lower risk because sellers do more of the work.

But if Sellpy can attract enough sellers who do not have time to list and ship items themselves, it could still gain an edge with a broader product range than Vinted. Rosengren believes that if Sellpy's model can aggregate more clothing, that would be a considerable competitive advantage.

H&M's Calculation

As majority shareholder, H&M says it is not worried about the inventory problem—its core business has long had to deal with piles of unsold clothing. H&M CEO Daniel Erver defends the business, saying headquarters can learn from Sellpy. Resale through Sellpy and other brands in the group contributed less than 1% of group revenue last year, but in his view, it opens a window onto a growth segment of the fashion market. Erver says secondhand is becoming a more natural way to consume, and keeping this business inside the group is extremely valuable and gives H&M a better understanding of consumer behavior.

Meanwhile, European regulators are pushing for more reuse and recycling, and European apparel retailers are moving into secondhand trading: Zara operates a consumer-to-consumer (C2C) marketplace, Zalando partners with Vestiaire Collective, and Marks & Spencer has teamed up with eBay. Data from RBC Capital Markets shows the secondhand clothing market is growing at more than twice the rate of the overall market, doubling in size over the past five years to $290 billion, or about 10% of global apparel sales. Analyst Richard Chamberlain warned in a July report that Sellpy's secondhand clothing risks cannibalizing H&M's core new-product sales; at the same time, he noted that young consumers often factor resale value into purchasing decisions.

For H&M and the entire fast-fashion camp, Sellpy is both a testing ground for understanding secondhand consumption and an unresolved cost equation: who bears the cost of authenticating, photographing, storing, and shipping each item that sells for less than $5 will determine whether secondhand resale is truly a business or an expensive piece of market research.

Source: H&M's Secondhand Bet Sellpy Still Loses Money After 12 Years · Originally published on 2026-09-28