The RealReal

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The RealReal, Inc.
TypePublic
NasdaqREAL
IndustryRecommerce
Founded2011
FounderJulie Wainwright
HeadquartersSan Francisco, California
Products
ServicesConsignment
RevenueIncrease $468 Million(2021)[1]
Number of employees
1700 (2019)
Websitetherealreal.com

The RealReal, Inc. is an online and brick-and-mortar marketplace for staff-authenticated luxury consignment.[2] Based on the circular economy, The RealReal sells consigned clothing, fine jewelry, watches, fine art and home decor. It employs an in-house staff of experts including horologists, gemologists, art curators and luxury fashion authenticators who inspect items for authenticity and value;[3][4] however, the company has received criticism for selling counterfeit merchandise, including from Forbes, which states often a single copywriter, not an authenticator, provides the only inspection for many items sold by The RealReal.[5][6]

History[edit]

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.[7]

In 2017, The RealReal opened its first permanent retail store in New York City and opened pop-ups in San Francisco and Las Vegas. In 2018, it opened its second location in Los Angeles.[8][9] In 2019, The RealReal opened a third location, its second in New York, on Madison Avenue.[10] In 2020, the company opened its fourth location in San Francisco’s Union Square,[11] a fifth in Chicago on the Magnificent Mile,[12] and a sixth in Palo Alto, California.[13] In 2021, the company opened locations in Brooklyn, New York,[14] Newport Beach, California,[15] Greenwich, Connecticut,[16] Austin, Texas,[17] Dallas,[18] Marin, California,[19] Atlanta,[20] Manhasset, New York,[21] and Palm Beach.[22] In 2022, The RealReal opened a location in Brentwood, Los Angeles.[23] As of February 4, 2022, The RealReal had 19 consignment offices across the U.S., 16 of which in its retail stores.

In early 2019, The RealReal announced it would be adding a half-million square foot e-commerce space in Perth Amboy, New Jersey, to its existing e-commerce centers in Secaucus, New Jersey, and Brisbane, California.[24] In 2020, the company announced it signed a lease to open an additional e-commerce center in Phoenix, Arizona.[25]

On May 31, 2019, The RealReal submitted a preliminary filing (S-1) to the SEC to go public.[26]

On June 28, 2019, The RealReal went public on Nasdaq under the symbol REAL and raised $300 million during its IPO.[27][28]

Counterfeits[edit]

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.[29][30]

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.[31] 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"[32] 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"[32] 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.[32]

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.[33][34]

The RealReal alerts law enforcement of counterfeit items it receives. Items sent to The RealReal deemed "friendly fakes",[35] counterfeit items purchased unintentionally, are usually returned to the client; others are destroyed or retained for training purposes.[35]

Sustainability[edit]

In 2017, The RealReal announced a sustainability partnership with luxury fashion brand Stella McCartney, which launched in 2018.[36][37] 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.[38][39][40] In 2019, the company marked National Consignment Day by launching a second sustainability partnership with luxury brand Burberry.[41] For National Consignment Day 2020, The RealReal announced its third sustainability partnership with Gucci.[42] 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[edit]

  1. ^ "The RealReal Announces Fourth Quarter and Full Year 2021 Results". February 23, 2022.
  2. ^ Danziger, Pamela N. "Luxury Brands Can't Ignore Fashion Reseller The RealReal Anymore". Forbes. Retrieved January 30, 2019.
  3. ^ Reid, Hilary (May 14, 2018). "The RealReal's Radical Vision of Secondhand Luxury". The New Yorker. ISSN 0028-792X. Retrieved January 30, 2019.
  4. ^ "How luxury consignment works at The RealReal". www.marketplace.org. October 17, 2018. Retrieved January 30, 2019.
  5. ^ Kestenbaum, Richard (October 23, 2019). "The RealReal Sold Me A $3,600 Fake; Here's Why Counterfeits Slip Through Its Authentication Process". Forbes. Retrieved September 27, 2022.
  6. ^ Zamost, Scott; Day, Andrea; Schlesinger, Jennifer (November 20, 2019). "The RealReal's 'Faux and Tell' reports disclose fake items published on the site and returned". CNBC. Retrieved September 27, 2022.
  7. ^ Kellaher, Colin (July 25, 2018). "Luxury Consignment Retailer RealReal Raises $115 Million". Wall Street Journal. ISSN 0099-9660. Retrieved April 4, 2019.
  8. ^ Tschorn, Adam (July 31, 2018). "The RealReal's first SoCal store boasts a dedicated men's space, a handbag vault and a 'sneakerdome'". Los Angeles Times. Retrieved January 30, 2019.
  9. ^ "Luxe Consignment Brand The RealReal Opens L.A. Storefront Complete With Whiskey Bar". The Hollywood Reporter. July 31, 2018. Retrieved April 4, 2019.
  10. ^ Edelson, Sharon (May 8, 2019). "The RealReal Appeals to Wealthy UES Residents With Curation and Service". WWD. Retrieved November 9, 2019.
  11. ^ "Bloomberg - RealReal Plans More Stores to Boost Fashion Resale Economy". Bloomberg.com. March 4, 2020. Retrieved April 3, 2020.{{cite news}}: CS1 maint: url-status (link)
  12. ^ Palmieri, Jean E. (October 23, 2020). "The RealReal Opens Store on Chicago's Michigan Avenue". WWD. Retrieved October 23, 2020.
  13. ^ "COVID Shopping: Palo Alto Luxury Consignment Shop The RealReal Sees Surge in Business Amid Pandemic". November 24, 2020. Retrieved February 5, 2021.
  14. ^ Petrarca, Emilia (January 26, 2021). "The RealReal Has Arrived in Brooklyn". The Cut. Retrieved February 5, 2021.
  15. ^ Friday, Dorothy Crouch |; February 5; 2021. "The RealReal Expands Resale Reach With New Locations". www.apparelnews.net. Retrieved February 8, 2021.{{cite web}}: CS1 maint: numeric names: authors list (link)
  16. ^ Marchant, Robert (March 7, 2021). "'Ideal location:' The RealReal opens on Greenwich Avenue". CTInsider.com. Retrieved April 5, 2021.
  17. ^ "Luxury resale shop with vintage treasures unbuttons first Austin storefront". CultureMap Austin. Retrieved April 6, 2021.
  18. ^ "Knox Street redo in Dallas includes The RealReal luxury consignment store". Dallas News. April 8, 2021. Retrieved April 8, 2021.
  19. ^ "The RealReal brings IRL designer consignment to Marin". 7x7 Bay Area. July 21, 2021. Retrieved August 9, 2021.
  20. ^ Wells, Myrydd (July 29, 2021). "The RealReal brings a brick-and-mortar upcycled luxury goods store to Atlanta". Atlanta Magazine. Retrieved August 9, 2021.
  21. ^ "Fashion Resale Company The RealReal Coming To Manhasset". Port Washington, NY Patch. August 4, 2021. Retrieved August 13, 2021.
  22. ^ Barnett, Kari. "For RealReal: Luxury consignment store fits in on Worth Avenue". sun-sentinel.com. Retrieved October 5, 2021.
  23. ^ "The RealReal Expands its SoCal Presence with New Brentwood Store". Uncover LA. February 4, 2022. Retrieved February 4, 2022.
  24. ^ Jacobs, Alexandra (January 23, 2019). "Tycoon of the Pre-Owned". The New York Times. ISSN 0362-4331. Retrieved January 30, 2019.
  25. ^ "Luxury online consignment retailer The RealReal signs big lease for Phoenix distribution center". www.bizjournals.com. Retrieved February 5, 2021.{{cite web}}: CS1 maint: url-status (link)
  26. ^ "S-1". sec.gov/. Retrieved June 4, 2019.
  27. ^ Maheshwari, Sapna (June 27, 2019). "The RealReal I.P.O.: Secondhand Fashion Goes Mainstream". The New York Times. ISSN 0362-4331. Retrieved July 15, 2019.
  28. ^ "The RealReal Raises $300 Million in IPO". The Business of Fashion. June 28, 2019. Retrieved August 21, 2021.
  29. ^ 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. Retrieved March 11, 2021.
  30. ^ Ell, Kellie (November 21, 2018). "Chanel and The RealReal Battle It Out Over What's Real and What's Fake". Women’s Wear Daily. Retrieved March 11, 2021.
  31. ^ Kestenbaum, Richard (October 23, 2019). "The RealReal Sold Me A $3,600 Fake; Here's Why Counterfeits Slip Through Its Authentication Process". Forbes. Retrieved September 23, 2022.
  32. ^ a b c Kestenbaum, Richard (February 22, 2021). "The RealReal Is Still Battling Fakes. It Won't Be Easy To Get It Right". Forbes. Retrieved September 23, 2022.
  33. ^ "NASDAQ: REAL Shareholder Notice: Lawsuit against the RealReal, Inc. announced by Shareholders Foundation". GlobeNewswire. March 10, 2020. ISSN 0362-4331. Retrieved January 28, 2019.
  34. ^ Jacobs, Alexandra (January 23, 2019). "Tycoon of the Pre-Owned". The New York Times. ISSN 0362-4331. Retrieved January 28, 2019.
  35. ^ a b Webb, Bella (January 31, 2022). "Inside the secretive world of luxury authentication". Vogue Business. Retrieved September 27, 2022.
  36. ^ Edelson, Sharon (October 2, 2017). "The Real Real, Stella McCartney Team to Embrace Circular Economy". WWD. Retrieved January 30, 2019.
  37. ^ Abad, Mario. "Why The RealReal And Stella McCartney Are Calling For Luxury Brands To Embrace Reselling". Forbes. Retrieved January 30, 2019.
  38. ^ "The RealReal Is Getting Real About Consignment Shopping Sustainability". NYLON. October 1, 2018. Retrieved January 30, 2019.
  39. ^ Kliest, Nicole. "See How Many Car Miles You Save When Secondhand Shopping With This Calculator". Who What Wear. Retrieved January 30, 2019.
  40. ^ Monday, Dorothy Crouch |; October 1; 2018. "The RealReal Observes National Consignment Day by Launching Sustainability Calculator". www.apparelnews.net. Retrieved April 4, 2019.{{cite web}}: CS1 maint: numeric names: authors list (link)
  41. ^ Millie Dent (October 7, 2019). "Burberry partners with The RealReal to test reselling high fashion". CNN. Retrieved November 9, 2019.
  42. ^ Farra, Emily (October 5, 2020). "Gucci and The RealReal Announce a Game-Changing Partnership". Vogue. Retrieved October 7, 2020.

External links[edit]