The RealReal Deal in Luxury Fashion

“RealReal is a digital fashion consignment market. The company began seven years ago with support from investors. Their priority is focused on selling women’s and men’s luxury fashion. They also sell accessories, art, and home decor. The company has grown exponentially over the years. RealReal CEO Julie Wainwright was mentioned in a recent article.

Julie Wainwright is pitching a new fundraising effort for RealReal. The fashion company is hoping to raise around 100 million dollars. Since 2011, RealReal has raised over 170 million dollars cumulatively. Their current fundraising efforts were examined for reasoning and justification. The business may just need more capital to appear strong and withstanding to investors in the public market. Another possibility is that investors finally understand the potential for luxury fashion profits in the consignment market. Other reasoning includes the possible financial implications of new brick and mortar locations.

RealReal is unlike any other secondhand digital fashion market. Competitors are either just starting, or they operate with a different business model. Some of them act as a selling platform where buyers and sellers directly exchange and ship to one another. Others have shied away from consignment markets to focus on selling new clothing. Others sell more affordable clothing alongside some luxury items. RealReal is focused on selling a variety of secondhand luxury items from companies like Louis Vuitton and Gucci. Their items all undergo authentication processes to maintain consumer trust and weed out the fakes.

At first, RealReal was disliked and feared by major online retailers. However, Kering reported that sellers from RealReal eventually buy items from the same brand they list on the site. These days, RealReal works together with brands like Kering and sees them as peers in a massive luxury marketplace.

Their consignment model works in a way that greatly benefits their sellers. The luxury items are shipped to RealReal. Once an item sells, the company takes between forty and fifty percent and the rest of the profits go to the seller. The item is then mailed directly to the customer.

Last year, they hosted a pop-up during the holiday season in New York City. In two weeks they’d made over two million dollars. This experiment brought in new and existing clients. As a result, RealReal is in the process of opening a brick and mortar location there. They’re currently weighing the advantages and disadvantages of expanding in that direction. Read more about The RealReal: