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The RealReal

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The RealReal, Inc.
Company typePublic
Nasdaq: REAL
IndustryRecommerce
Founded2011; 13 years ago (2011)
FounderJulie Wainwright
HeadquartersSan Francisco, California
Key people
Products
ServicesConsignment
RevenueIncrease $603 million (2022)[1]
Number of employees
3200 (2023)
Websitetherealreal.com

The RealReal, Inc. is an online marketplace for users to buy and sell luxury goods that are authenticated by experts. It has more than 34 million members, and has sold nearly 36 million items as of Sept. 30, 2023.[2][3]

History

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The RealReal was founded in 2011 by Julie Wainwright, an e-commerce entrepreneur. By July 2018, the company had raised $288 million in venture capital funding.[4]

On May 31, 2019, The RealReal submitted a preliminary filing (S-1) to the SEC to go public.[5]

On June 28, 2019, The RealReal went public on Nasdaq under the symbol REAL and raised $300 million during its IPO.[6][7]

On June 22, 2022, The RealReal announced that its founder and CEO Julie Wainwright had stepped down.[8] The company appointed President and COO Rati Sahi Levesque and its CFO Robert Julian as interim co-CEOs.

On January 25, 2023, The RealReal announced the appointment of E-Commerce and Digital Executive John E. Koryl as CEO and Board Member.[9]

Services

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They cover sellers with free virtual appointments, in-home pickup, drop-off and direct shipping. As a full-service, luxury consignment[10] service, The RealReal does all of the work for its consignors, including authenticating, using AI and machine learning to determine optimal pricing, photographing and listing items, as well as handling shipping, payments and customer service.[11]

Retail footprint

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Location in Greenwich, Connecticut

In 2017, The RealReal opened its first permanent retail store in New York City, and has since opened stores across the US including locations in California, Connecticut, Florida, New York and Texas. To date, the company has 15 Luxury Consignment Offices where consignors can drop items off and meet with a valuation specialist, and 12 of those 15 locations allow customers to browse and shop.

Counterfeits

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The RealReal has had multiple claims from luxury designers that items on their website were counterfeit. In 2018, Chanel filed suit in the Federal Court of the Southern District of New York, alleging The RealReal for hosted counterfeit Chanel on their website and misled customers that an affiliation existed between the two.[12][13]

In 2019, Richard Kestenbaum, writing for Forbes, disclosed purchasing a bag from The RealReal for $3,600, sold as an authenticated Christian Dior bag, that was found to be counterfeit. Kestenbaum claims the only authentication of many pieces at The RealReal is from a single copywriter, whose main task is to write the descriptions of the merchandise being sold, instead of the expert authenticators The RealReal advertises.[14] In a 2021 update, Kestenbaum wrote about a customer who paid $1,000 for a pair of Christian Dior sneakers from The RealReal, but upon receiving them, was suspicious of their quality and sent the shoes to be authenticated by LegitGrails, a third party authenticator. LegitGrails uses no fewer than four authenticators to authenticate a single item, compared to The RealReal's alleged use of a single copywriter for authentication, and determined the customer's shoes were a "lower grade replica"[15] of Dior sneakers. The RealReal refunded the customer; when Forbes asked the company for a comment, it stated it has the "most rigorous authentication process in the marketplace"[15] and has added artificial intelligence to its authentication process. Forbes claims the large amount of merchandise processed by The RealReal to maintain profit margins (the company went public in 2019) makes it inevitable that counterfeit products slip past its authentication and into the hands of customers.[15]

In early 2020, TheRealReal was sued in a class action lawsuit regarding misstatements to investors, alleging that authenticators were given very little training and strict quotas that resulted in the potential for counterfeit or mislabeled items to make it through the company's authentication process more often than purported.[16][17]

The RealReal alerts law enforcement of counterfeit items it receives. Items sent to The RealReal deemed "friendly fakes",[18] counterfeit items purchased unintentionally, are usually returned to the client; others are destroyed or retained for training purposes.[18]

Sustainability

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In 2017, The RealReal announced a sustainability partnership with luxury fashion brand Stella McCartney, which launched in 2018.[19][20] It also established the first Monday in October as National Consignment Day, an annual holiday. The following year, to mark National Consignment day, The RealReal launched a custom sustainability calculator. Developed with environmental consulting firm Shift Advantage, it measures the environmental impact of consignments processed by the company.[21][22][23] In 2019, the company marked National Consignment Day by launching a second sustainability partnership with luxury brand Burberry.[24] For National Consignment Day 2020, The RealReal announced its third sustainability partnership with Gucci.[25] When consumers consign or buy Gucci on The RealReal through the end of 2020, a donation will be made to One Tree Planted to support its mission to protect biodiversity and reforestation.

References

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  1. ^ "The RealReal Announces Fourth Quarter and Full Year 2021 Results" (Press release). February 23, 2022. Archived from the original on April 25, 2022. Retrieved April 25, 2022.
  2. ^ Reid, Hilary (May 14, 2018). "The RealReal's Radical Vision of Secondhand Luxury". The New Yorker. ISSN 0028-792X. Archived from the original on August 19, 2018. Retrieved January 30, 2019.
  3. ^ Ryssdal, Kai; Palacios, Daisy (October 17, 2018). "How luxury consignment works at The RealReal". Marketplace. Archived from the original on April 4, 2019. Retrieved January 30, 2019.
  4. ^ Kellaher, Colin (July 25, 2018). "Luxury Consignment Retailer RealReal Raises $115 Million". Wall Street Journal. ISSN 0099-9660. Archived from the original on April 4, 2019. Retrieved April 4, 2019.
  5. ^ "S-1". sec.gov. Archived from the original on June 4, 2019. Retrieved June 4, 2019.
  6. ^ Maheshwari, Sapna (June 27, 2019). "The RealReal I.P.O.: Secondhand Fashion Goes Mainstream". The New York Times. ISSN 0362-4331. Archived from the original on July 15, 2019. Retrieved July 15, 2019.
  7. ^ Hytha, Michael; Rockeman, Olivia; Bhasin, Kim (June 28, 2019). Baker, Liana; Moffat, Anne Riley; Roeder, Jonathan (eds.). "The RealReal Raises $300 Million in IPO". The Business of Fashion. Bloomberg. Archived from the original on August 21, 2021. Retrieved August 21, 2021.
  8. ^ "Founder Julie Wainwright to Step Down as CEO, Chairperson and Director of The RealReal". The RealReal. June 7, 2022. Archived from the original on December 7, 2023.
  9. ^ "The RealReal Appoints E-Commerce and Digital Executive John E. Koryl as CEO and Board Member". The RealReal. January 25, 2023. Archived from the original on December 7, 2023.
  10. ^ Danziger, Pamela N. (August 22, 2018). "Luxury Brands Can't Ignore Fashion Reseller The RealReal Anymore". Forbes. Archived from the original on December 12, 2018. Retrieved January 30, 2019.
  11. ^ Kestenbaum, Richard (October 23, 2019). "The RealReal Sold Me A $3,600 Fake; Here's Why Counterfeits Slip Through Its Authentication Process". Forbes. Archived from the original on September 27, 2022. Retrieved September 27, 2022.
  12. ^ Broderick, Vernon S. "OPINION AND ORDER re: 29 MOTION to Dismiss First Amended Complaint. filed by The RealReal, Inc". law.justia.com. United States District Court for the Southern District of New York. Archived from the original on December 25, 2021. Retrieved March 11, 2021.
  13. ^ Ell, Kellie (November 21, 2018). "Chanel and The RealReal Battle It Out Over What's Real and What's Fake". Women’s Wear Daily. Archived from the original on January 6, 2021. Retrieved March 11, 2021.
  14. ^ Kestenbaum, Richard (October 23, 2019). "The RealReal Sold Me A $3,600 Fake; Here's Why Counterfeits Slip Through Its Authentication Process". Forbes. Archived from the original on September 27, 2022. Retrieved September 23, 2022.
  15. ^ a b c Kestenbaum, Richard (February 22, 2021). "The RealReal Is Still Battling Fakes. It Won't Be Easy To Get It Right". Forbes. Archived from the original on April 1, 2022. Retrieved September 23, 2022.
  16. ^ "NASDAQ: REAL Shareholder Notice: Lawsuit against the RealReal, Inc. announced by Shareholders Foundation". GlobeNewswire. March 10, 2020. ISSN 0362-4331. Archived from the original on June 6, 2020. Retrieved January 28, 2019.
  17. ^ Jacobs, Alexandra (January 23, 2019). "Tycoon of the Pre-Owned". The New York Times. ISSN 0362-4331. Archived from the original on January 29, 2019. Retrieved January 28, 2019.
  18. ^ a b Webb, Bella (January 31, 2022). "Inside the secretive world of luxury authentication". Vogue Business. Archived from the original on September 26, 2022. Retrieved September 27, 2022.
  19. ^ Edelson, Sharon (October 2, 2017). "The Real Real, Stella McCartney Team to Embrace Circular Economy". WWD. Archived from the original on June 24, 2019. Retrieved January 30, 2019.
  20. ^ Abad, Mario (April 19, 2018). "Why The RealReal And Stella McCartney Are Calling For Luxury Brands To Embrace Reselling". Forbes. Archived from the original on August 25, 2018. Retrieved January 30, 2019.
  21. ^ Belcher, Sara (October 1, 2018). "The RealReal Is Getting Real About Consignment Shopping Sustainability". NYLON. Archived from the original on April 4, 2019. Retrieved January 30, 2019.
  22. ^ Kliest, Nicole (October 1, 2018). "See How Many Car Miles You Save When Secondhand Shopping With This Calculator". Who What Wear. Archived from the original on April 4, 2019. Retrieved January 30, 2019.
  23. ^ Crouch, Dorothy (October 1, 2018). "The RealReal Observes National Consignment Day by Launching Sustainability Calculator". California Apparel News. Archived from the original on April 4, 2019. Retrieved April 4, 2019.
  24. ^ Millie Dent (October 7, 2019). "Burberry partners with The RealReal to test reselling high fashion". CNN. Archived from the original on November 9, 2019. Retrieved November 9, 2019.
  25. ^ Farra, Emily (October 5, 2020). "Gucci and The RealReal Announce a Game-Changing Partnership". Vogue. Archived from the original on October 10, 2020. Retrieved October 7, 2020.
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