The RealReal, a secondhand luxury retailer, raised over $300 million in an initial public offering (IPO). Their shares jumped almost 50% – from $20 to $28.90 – and The RealReal’s market value is estimated at approximately $2.5 billion.
Founded by Julie Wainwright in 2011, The RealReal is the most popular marketplace that sells authenticated secondhand goods, such as Cartier and Gucci. More than 100 experts are employed to make sure that there are no counterfeits among the sold goods, and the company itself has earned $207.4 million in revenue in 2018.
The secondhand retail market is worth around $28 billion, and is projected to overtake retailers such as H&M by 2028. Resale itself is also expected to grow – from 20% to 45% – by 2023.
Julie Wainwright said: “When we look at where we’re taking share from and share of wallet, it tends to be the fast-fashion market. Our biggest group of customers and now consignors are now millennials. They’re hyper-conscious about sustainability and the impact on the environment of buy-new.”
Because of the state of the economy, younger shoppers are increasingly buying secondhand goods. A recent report states that over 50% of Gen Z (people born after 1997) have bought and sold items secondhand.
TheRealReal takes a 35% commission from every sold item. “It’s a high take rate, but we’re a high-service model. We do all the work for the consignment, we focus on luxury, and we do the authentication,” said Julie Wainwright.
The RealReal has one store in Los Angeles, two stores in New York, and 11 luxury consignment offices.