Postmoda emerges at a moment when online shopping is booming, but so is a quieter crisis lurking in the backrooms of warehouses and the corners of customers’ homes: returns.

Every full online cart, every “order now, decide later” purchase, feeds into a system that apparel brands privately acknowledge as a major cost centre, but rarely discuss in public. In 2023 alone, fashion retailers in the US spent an estimated $25.1 billion just on processing returns, according to data cited by Business Insider

That mountain of unwanted jeans, dresses and jackets doesn’t simply go back on the website. Much of it is bundled onto pallets and sold in bulk to liquidators, shipped off to other countries, or dumped, contributing to more than 8 billion pounds of returned goods ending up in landfills in a single year.

Into this messy, expensive blind spot steps Postmoda, a new marketplace that wants to turn luxury and designer returns into a viable, data-rich revenue stream instead of a write-off.

From Wardrobe to Postmoda: A Founder Rethinks Returns

In 2021, entrepreneur Adarsh Alphons launched Wardrobe, a peer-to-peer apparel rental platform that used dry cleaners as intermediaries between lenders and renters. The concept attracted early backing: Alphons raised $5.6 million across two funding rounds from investors including Slow Ventures and Long Journey Ventures.

But scaling that rental model proved harder than it looked. The dry-cleaner-centric logistics were complex and, in Alphons’ view, not built for long-term growth. Roughly a year after launch, he paused to reassess where the real pain points were for fashion and retail.

In those conversations with brands and merchandising leaders, one theme kept resurfacingm but rarely in public: returns.

Brands were paying heavily to process items that might never go back on their shelves. Yet, as Alphons said, nobody wanted to talk about where those products actually ended up.

The answer, he realised, was “not good for business or the world at large” and it was getting worse as e-commerce volumes grew.

The Returns Crisis: High Costs, Hidden Waste

The scale of the problem is stark. About 20% of items purchased online are expected to be returned this year.

Several forces drive that number:

• The inability to try items on before purchase
• Consumer habits such as “wardrobing” (ordering pieces to wear once and then return)
• Rising shipping and processing costs for retailers

For many brands, the economics of re-listing returned items simply don’t work. Photographing, re-tagging, re-stocking, and re-uploading a product to an online storefront, often for a single SKU, can cost more than any potential margin.

So the goods are pushed down the line, to liquidators, secondary markets, or the dump. The environmental and reputational consequences are significant, but because the system is fragmented and opaque, returns have traditionally been treated as an unavoidable cost of doing business. Postmoda is trying to recast them as an opportunity.

What Postmoda Does: A Marketplace Built on Returns

Postmoda, which is set to launch publicly this week, positions itself as a luxury and designer returns marketplace that plugs directly into retailers’ returns flows.

Here’s how the model works, based on the pitch deck:

1. A customer initiates a return with a participating retailer.
2. Instead of going back to the brand’s own warehouse system, the item is routed to a Postmoda warehouse.
3. There, AI tools screen the item and set a selling price, taking into account brand standards and condition.
4. The item is listed for sale on Postmoda’s marketplace.
5. Once sold, the original retailer gets a cut of the sale, along with data about the new buyer.

For brands, Postmoda pitches four main benefits, as laid out in its deck:

• Increased profitability and loss minimisation on returns
• Sustainability, by keeping returns out of landfills
• Customer acquisition, by exposing product to new buyers
• Analytics and insights on who is buying those returned products and how

The proposition is that returns stop being an accounting headache and become a structured, data-rich revenue channel.

Testing the Model Before the Pivot

Before formally relaunching as Postmoda, Alphons wanted to know if there was real demand for returned inventory among shoppers.

he tested the concept by selling millions of units of returned items on platforms like Poshmark and eBay.

Those experiments convinced him that there was a robust secondary demand for quality returned merchandise, particularly when the brands involved were recognisable and the pricing was compelling. That test phase became the bridge between Wardrobe’s rental model and Postmoda’s returns marketplace.

Crucially, Postmoda’s pivot did not require courting a whole new slate of investors. Instead, Alphons went back to the same backers who had believed in Wardrobe.

Existing investors, including JD Ross, cofounder of real estate platform Opendoor, and Rus Yusupov, cofounder of Vine, decided to double down on the new direction. They invested an additional $200,000 in January 2023 to support the build-out of Postmoda’s technology and retailer relationships.

That extension sits on top of the earlier $5.6 million already raised, providing a financial runway for the pivot and early marketplace rollout.

A Classic Startup Pivot With a Sustainability Twist

Postmoda’s shift from rental platform to returns marketplace follows a familiar arc in the startup world. Some of tech’s most recognisable names including Slack and YouTube, began as very different products before finding the model that matched the market.

The difference here is that Postmoda’s new direction sits at the intersection of:

• Cost pressure on fashion and apparel retailers
• Growing consumer acceptance of secondhand and resale, especially in luxury
• Increasing scrutiny of waste and sustainability practices in fashion

Scaling a Returns-First Marketplace

For now, Postmoda is still early in its journey. The marketplace is only just opening up to the public, and the company is focused on building technology and deepening its relationships with retailers.

Looking ahead, Alphons plans to raise a Series A round next year to scale operations and partnerships. The aim will be to get more brands sending their returns directly to Postmoda, increasing the breadth of inventory and the richness of data that can be shared back with retailers.

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