We visited The RealReal in advance of its IPO and saw why its leading the luxury resale market
- The RealReal - a San Francisco-based online luxury consignment retailer - is expected to price its IPO on Thursday, positioning it as the first resale company to go public.
- The company's anticipated valuation of $1.5 billion points to a growing demand for luxury resale goods as U.S. consumer demand grows within a $6 billion market.
- We visited one of The RealReal's brick-and-mortar locations to see how the reseller has excelled in the business of luxury consignment.
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In a lush outdoor cafe at The RealReal store in Soho, Manhattan, a young man plops down at a table and reaches eagerly into a shopping bag to extract his purchase - a pair of Balenciaga socks, cheekily designed to look like Bernie Sander's campaign logo. He rolls the socks up his ankles carefully before snapping a few photos, sliding his leather sandals on over the socks, and then walks jubilantly out of the store.
The shopper was one of several trendy customers hoping to score a deal on a Birkin bag or a pair of Gucci loafers on Wednesday afternoon, one day before The RealReal's anticipated IPO. The move comes more than three years after rumors first arose over a possible IPO, and will solidify The RealReal as the first resale company to go public. Analysts estimate it will receive a valuation of $1.5 billion.Read more: This company wants your used handbags - and it's coming for Wall Street
Since founder Julie Wainwright started selling secondhand designer goods from her kitchen table in 2011, The RealReal managed to carve a niche within the burgeoning resale market and appeal to consumers seeking out sustainable fashion options. While companies like Vestiaire Collection debuted a similar model, The RealReal excelled in both product selection and its meticulous authentication processes - a daunting task when grappling with a counterfeit market worth an estimated $461 billion dollars.
The RealReal IPO highlights the explosive growth of the luxury resale market, as an increasing number of companies look to capitalize on the business. According to a report from Bain & Company, the U.S. resale market for high-end goods was estimated to be $6 billion in 2018 and is expected to reach $51 billion globally by 2023. In response, resale companies that historically carried mid-market brands including Depop, ThredUp, and Poshmark (which is also expected to file IPO paperwork this year) began their foray into luxury.
We visited its Soho store, one of three total physical retail locations in New York City, and saw why the company is leading the luxury resale movement.