If you are into brand names such as Gucci and Louis Vuitton, you know the issues with possibly getting knock-offs while paying high retail prices. Fashion site The RealReal is changing this. They check each piece they sell to ensure it is authentic, ensuring customers a knock-off free shopping experience. In 2017 CEO Julie Wainwright secured $123 million in venture funding. Further, they expected to gross $500 million. This financial popularity is due to the RealReal’s huge success. They specialize in luxury fashion and have undoubtedly cornered the market.
Now, in 2018, The RealReal is seeking to raise $100 million in new funding. This is interesting because Mrs. Wainwright has said for years that they would stop seeking private financing and instead seek an IPO. It is possible that she feels the company has not reached a size that would appeal to investors in the public market. Also, she may feel the business needs to prove its worth as a standalone business. Another option is that investors have realized that there is a huge market for second-hand luxury goods and that the site will take a greater market share if more is invested in the growth of The RealReal.
The growth of The RealReal can be attributed to its consignment model and unbeatable authentication standards for the goods it consigns. Sellers can ship their items to the company where they are then inspected for condition and authentication before being put on the site. The seller then receives 50-60% of the sale. While occasionally an item slips through the cracks, it is so rare that consumers have high trust with the site. The site has grown considerably in scope as well. It began only with women’s luxury fashion and now sells jewelry, art, watches, home décor, and menswear. They even have a brick and mortar store in New York City.
Surely the fast and large growth of The RealReal indicated good things for the future. While only open to private investors now, hopefully soon the rest of us will be able to get in on this wonderful site.