Luxury Secondhand Retailer The RealReal Adding Stores As Sales And Customers Rise

The RealReal, which operates the world’s largest online marketplace for secondhand luxury goods, said it will add additional “neighborhood stores” in affluent communities as it projected GMV (gross merchandise value) would grow by up to 80 percent this quarter.

This, as the San Francisco-based platform for designer bags, jewelry and shoes said it posted record first-quarter GMV of $327 million for the three months ending March 31, noting that its base of first-time shoppers rose 34 percent while its roster of new consignors also set a new high.

“After more than a year of navigating the tough challenges created by COVID, we are incredibly pleased to report our return to growth,” Founder and CEO Julie Wainwright said. “As we build on our recent momentum and march toward profitability, we remain focused on driving scale and operating efficiency gains,” she said, adding that “we are optimistic our performance will continue to improve significantly throughout 2021.”

The 10-year-old company also noted that it had paid out $2 billion in cumulative consignment commissions and had been able to resume its in-home concierge service as a result of the improving pandemic and vaccination trends.

“The early performance of at-home concierge appointments is very encouraging and we believe is indicative of pent up consignor supply,” Wainwright told investors.

Additionally, The RealReal said it opened three small neighborhood stores in Brooklyn, Newport Beach, Calif.; and Greenwich, Conn. in Q1 and said it had just expanded its physical footprint into Austin and Dallas and was now projecting it was on track to operate a total of 10 neighborhood stores by the end of June.

The company said its in-store buyers spent 4.4 times more than online-only shoppers in Q1 with an Average Order Value (AOV) that was nearly triple that of its digital customers.

The Growth Of Circular

Since its founding in 2011, The RealReal has embraced a mission of increasing sustainability and changing the way consumers think about the fashion and apparel they buy, as well as the value of unused goods that take up closet space.

In addition, the company launched its upcycled ReCollection April 1 with the support of eight fashion designers donating damaged and unused fabric to be repurposed into a custom made line of new clothes, at a time of unprecedented demand for second hand goods at all price points.

“We’ve brought more than 22 million members into our circular marketplace, educating them about the lasting value of luxury goods and driving a shift toward more conscious consumption,” Wainwright said, noting the growing appeal of monetizing clothing and bags that consumers no longer wear or use.

Mostly Sunny Forecast

The way The RealReal manages its buyers, sellers and merchandise is clearly striking a chord with consumers as the company reported that over 80 percent of its business came from repeat customers.

As far as Q2 is concerned, RealReal said it anticipates GMV to be in the range of $320 million to $330 million, which represents 75 to 80 percent growth from the throes of the lockdown era last year.

On the housekeeping front, the company also announced that it has begun a search to find a successor for CFO Matt Gustke, who is leaving the company after eight years on the job.

Shares of The RealReal are up about 50 percent in 12 months leaving the company with a market value of about $1.8 billion.