Clothing spending has returned to growth in the United States after nearly three years of decline, with gains concentrated in luxury fashion and discount apparel even as department stores have continued to lose ground. Bank of America Institute data has also shown resale platforms gaining traction, as apparel prices remain elevated and household budgets stay stretched.
- Clothing spending per household rose 5.1% year-over-year in March on a non-seasonally adjusted three-month moving average, surpassing total card spending overall.
- Secondhand fashion transactions per household grew nine times faster than spending in March, with shoppers across income groups spending less on each purchase.
- The report Secondhand fashion creates a closet refresh was published by Bank of America Institute earlier this month, noting apparel prices are about five times higher than a century ago.
THE DATASET: The Bank of America Institute report used aggregated, anonymised US customer transaction data to examine clothing purchases, secondhand fashion activity and resale earnings. Its evidence base includes credit and debit card spending, deposit inflows, debit card and Automated Clearing House channels, merchant classifications, and generational categories, with secondhand fashion limited to market-driven platforms rather than donation-based or charity-centred thrift models.
- Spending data covers active US households using Bank of America consumer cards, excluding corporate cards and customers making fewer than five monthly transactions.
- Secondhand fashion retailers are identified through industry-researched merchant names, with transactions conducted mainly on digital platforms but also including physical stores.
- Seller data captures payment inflows into customer accounts, excluding revenue kept on resale platforms as credit towards another purchase after sale.
- Generational categories separate Gen Z, younger Millennials, older Millennials, Gen X, Baby Boomers and Traditionalists using birth-year ranges stated in the methodology.
THE APPAREL SPLIT: Apparel demand has strengthened unevenly, with Bank of America card data showing overall clothing growth alongside diverging category performance. Luxury fashion recorded the strongest first-quarter gains, discount apparel and young-adult clothing also improved, and department stores weakened further. The report links these differences to a wider split in discretionary spending, with Gen Z the only generation showing apparel gains across income groups.
- Per-household clothing spending has posted largely steady year-over-year gains since August 2025, ending a decline that lasted almost three years.
- Luxury fashion growth in the first quarter of 2026 was more than five times higher than its growth in the fourth quarter of 2025.
- Department-store spending fell 3.6% year-over-year in the first quarter, while teen retail apparel declined further from the previous quarter.
- Discount apparel growth rose alongside young-adult clothing, with the report linking young-adult gains to Gen Z’s apparel growth across income cohorts.
- Lower-income Gen X households were the only group whose apparel spending growth deteriorated this year compared with last year’s equivalent period.
THE RESALE SHIFT:Resale activity has expanded across purchasing and selling, with secondhand platforms linking circular consumption and small-scale seller participation. The report records lower transaction values across income groups, wider acceptance of pre-owned luxury, and rising seller participation. Even so, resale selling remains mostly occasional, with most customers using platforms for periodic closet clear-outs rather than regular income.
- Higher-income households accounted for the largest dollar share spent on secondhand clothing in March, while CivicScience data showed similar preference for secondhand and new luxury.
- Secondhand fashion spending patterns have varied by income cohort since April 2025, with lower-income households showing sharper declines.
- ThredUp’s 2026 Resale Report, cited by Bank of America Institute, expects the US secondhand apparel market to reach $78.8 billion by 2030.
- The number of Bank of America customers selling at secondhand retailers grew 16% year-over-year in March, while average monthly earnings rose 13%.
- Almost 73% of resale sellers used platforms once a quarter or once a month in the first quarter of 2026.
