Will The RealReal Be the First US Resale Site to File for an IPO?
After raising nearly $300 million, opening two brick-and-mortar stores and trouncing many of its competitors, luxury consignment site The RealReal may be preparing to go public.
According to Reuters sources, the eight-year-old company is in talks with investment banks about a potential IPO in 2019. Founder and CEO Julie Wainwright, who has yet to comment on the reports, expressed plans for an eventual public offering as early as 2016. Since then, she has scaled the company significantly, investing in massive warehouses across the country, launching pop-up shops and permanent retail spaces and, in 2018, raising $115 million in Series G funding.
If the IPO is successful, The RealReal will be the first U.S. resale site to go public, underscoring the increasing importance of the re-commerce sector, which also includes resale sites such as ThredUp, Poshmark and Depop, as well as brick-and-mortar chains like Beacon’s Closet and Buffalo Exchange. Meanwhile in Japan, the second-hand luxury fashion and accessories company, SOU Inc., deputed on the Tokyo Stock Exchange in March 2018.
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According to a 2017 report from Coresight Research, the resale market is growing 20 times faster than the broader retail market, and the total U.S. apparel resale market (brick-and-mortar plus online) is on track to be worth $33 billion by 2021.
The RealReal has come to dominate the upper end of the market in fashion and accessories (it also sells furniture and art), promising authentic pieces from designer names such as Dior, Balenciaga and Gucci. While it is on good terms with the two biggest luxury conglomerates in the world — Kering and LVMH — and has collaborated with Stella McCartney on a sustainability campaign, there’s still one name that has yet to get on board. In November, Chanel filed a lawsuit in federal court alleging that the site sold counterfeits and misled customers into thinking it was affiliated with the house. The RealReal has since denied all claims and filed a motion to dismiss, which is still pending.
