At her vintage store in Santa Cruz, California, Mely Olmeda sells a range of clothing, much of it from the early aughts, including sheer tops, low-rise denim flares and anything with lace or loud prints. She also rents rack space to other vendors, which helps pay the rent and other overhead.

“It’s a foolproof setup,” said Olmeda, who started Virgo Santa Cruz in 2022 and has since doubled the size of her store to 4,000 square feet.

While thrift stores have always been around, the vintage and resale business has boomed — and shifted — in recent years for independent sellers, like Olmeda, who use creative sharing models. And retail giants like Banana Republic, Madewell and H&M, veteran resellers like REI and Goodwill and property developers are getting into the resale game.

Today, there are over 25,000 resale stores in the United States, and secondhand apparel sales increased about 11% in 2023 from the year before, according to statistics compiled by Capital One. In 2023, apparel resale in the United States grew seven times the rate of the broader retail industry, and the used clothing market reached $43 billion, up from about $23 billion in 2018, according to a recent report from ThredUp, an online consignment platform that has worked with big retailers like Lululemon, J. Crew and Abercrombie & Fitch to resell their used clothing.

A varied industry, secondhand clothing stores consist of national chains, small businesses and nonprofits across a range of price points and styles. And while many shoppers like to get their retail therapy fix online on sites such as the RealReal and Etsy’s Depop, people looking for the best deals in used goods or a rare vintage item often prefer to see, feel or try on the pieces in person. That makes brick-and-mortar stores essential to the resale business model, vendors and industry experts say.

Online sales are “something you have to do, but nothing will replace in-person shopping for vintage,” said Richard Wainwright, a well-known vintage retailer who owns a vintage store, Arcade, at the Row DTLA, a 30-acre renovated shopping and dining hub in Los Angeles. That’s because when it comes to secondhand items, he said, “everything is one of one — there is no sense this is how this brand fits me.”

The increase in storefront openings, even in the face of booming online sales, has gotten the attention of the real estate industry. In California, a fashion hub in its own right, seven secondhand clothing stores have opened in downtown Santa Cruz since 2020. In Los Angeles, three locations have opened in the past few years at the Row DTLA.

Mass market retail conglomerates have been getting in on the action, too. They have been responding to generational shifts in shopping preferences and collaborating with vintage stores as well as offering limited in-store resale of their own branded clothing. In a number of its stores, Madewell, the sister brand to J. Crew, sells secondhand jeans from consumers who drop off their used Madewell denim. Customers can also drop off or mail in jeans from any brand for a $20 store credit toward a new pair of jeans.

And this year, Banana Republic opened a 17,000-square-foot store in New York’s SoHo neighborhood with a 225-square-foot shop within it that sells an assortment of its own branded clothing from the 1980s and ’90s, including cargo pants, leather jackets and accessories from a third-party supplier. The space is Banana Republic’s first to offer its own vintage items.

H&M also opened a new store in SoHo this year that includes a 130-square-foot resale store. It is its first in the United States to sell secondhand items, which are curated by James Veloria, a designer-vintage retailer with stores in New York and Los Angeles. (H&M opened used-goods spaces last year in London and Barcelona, Spain.)

REI, the outdoor apparel and gear cooperative that has long been a leader in salvage and reuse, expanded its long-standing in-store used-merchandise section into two stand-alone “Re/Supply” stores that sell exclusively secondhand items. One is in Portland, Oregon, and opened last year, and the other is in Manhattan Beach, California, and opened in 2020.

But selling secondhand items poses challenges, too: Namely, processing used merchandise is more labor intensive than traditional retail, said Laura Kelley, senior manager of recommerce for REI.

The Re/Supply store in Portland, which is in a repurposed building, was designed to accommodate resale’s “high touch, manual processes,” Kelley said, with extra warehouse space and a special layout that includes stations for staff to inspect and price items as they come in.

Still, with its Re/Supply initiative, REI “saw an opportunity to attract a new customer,” Kelley said. “It’s a unique way to collect all of our used items in one physical location, and it becomes a treasure hunt with a constantly changing selection of inventory.”

Adding new lines of business to diversify offerings can also help resellers attract bigger crowds and new customers. Goodwill, the largest secondhand store operator in the country, has started hosting wedding pop-ups in stores and bridal shows, featuring gowns donated by the designer Galia Lahav, as well as decor items like vases, candlesticks and table settings for the wedding day.

Goodwill has put more effort into its e-commerce business in recent years, but in-person shopping has continued to reign supreme for used goods, said David Eagles, chief operating officer of the company. Goodwill has opened more than 400 stores over the past decade; these include boutique apparel shops that feature designer brands at higher prices, as well as outlet stores, where shoppers buy clothes in bulk for as little as $1 a pound, sometimes to resell on third-party marketplaces like Poshmark and Depop or at independent vintage shops.

Wainwright, the vintage retailer in Los Angeles, hosts a monthly clothing fair at the Row DTLA. Around 50 vendors set up their shops, attracting about 1,000 shoppers every month. Wainwright also invites pop-up sellers to his store on weekends.

Olmeda of Virgo Santa Cruz said bringing vendors together nurtures community “and that is big in the vintage space.”

Accordingly, Olmeda said she was not worried about the growing number of vintage shops moving into the neighborhood. “More cool stuff downtown just means more people coming downtown,” she said.