Lululemon is diving into the $30 billion resale market by offering money for used yoga pants

• Lululemon is piloting a new service to enable customers to swap used clothes for gift cards.
• These clothes will be washed and resold at a discount.
• Analysts are advising retailers to get into resale to make money and attract sustainability-conscious customers.

Lululemon is dipping its toes into the booming resale market.

The athleisure clothing giant, which is known for its $100 workout leggings, announced Tuesday that it is launching a new resale initiative known as Like New.

Starting in May, customers will be able to return "gently used" Lululemon clothing to certain stores in California and Texas in exchange for a gift card to spend online at the brand.

These items will be washed and then available for other customers to buy back at a discount. A company spokesperson told Insider that the level of discount will depend on whether the item is in "like new" condition or "gently used." Any items that don't make the cut will be recycled. Lululemon said it is partnering with resale operations expert Trove to roll out this new service.

Lululemon is among the first major retailers in the US to make moves into the $30 billion resale market. Analysts say that there an immediate opportunity for companies to cash in on this growing market, while also showing customers and investors that they are more sustainability-minded.

Jefferies analysts recently estimated that the secondhand market will represent more than 10% of the apparel market over the next 10 years.

"Legacy retailers should start to take note, and find a way to participate," these analysts wrote.

Offering resale options is especially important if Lululemon wants to attract younger customers, who are spending more on resale than any generation before, according to Jefferies.