On May 31, secondhand luxury e-tailer The RealReal filed for an initial public offering with the Securities and Exchange Commission.
The San Francisco–based reseller, which claims 11.4 million members, hopes to raise as much as $100 million and list on the Nasdaq exchange under the symbol REAL. According to Pitchbook, it has raised more than $338 million from private investors.
In 2018, its revenue totaled $207.4 million, a 55% leap from the year before. Despite this growth, it has yet to make money. In 2018, it lost $75.7 million, up from $52.3 million in 2017. As of March 31, it had an accumulated deficit of $281 million. It expects that its operating losses will continue for “the foreseeable future.”
Its prospectus says that in 2018, it offered 620,000 items for sale, valued at $711 million. Some $175 million of that was secondhand jewelry and watches, up from $134 million in 2017. Overall, the jewelry and watches category represents the company’s second-largest merchandise category next to women’s.
The top-selling designers on its marketplace include Cartier, Chanel, Christian Louboutin, Gucci, Hermès, Louis Vuitton, Prada, Rolex, Tiffany & Co., and Valentino, it said.
The prospectus warns that its success depends on its ability to accurately authenticate what it offers, including its jewelry. Each piece comes with an authentication certificate, and the site boasts a zero-tolerance policy toward counterfeit goods. Still, in 2018, Chanel filed a lawsuit against it, charging breaches of its trademark and intellectual property, and included allegations that some Chanel products sold on the site were counterfeits. The outcome of the litigation is uncertain, The RealReal said.
In addition to its online site, The RealReal has three brick-and-mortar outlets, two in New York City and one in Los Angeles.
In 2017, Michael Groffenberger, then-managing director of The RealReal’s luxury consignment offices, told JCK the company’s jewelry “sweet spot” was around $1,000, but it has sold items worth up to $100,000—including a pair of Graff earrings for $99,950 through its app.
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