Luxury consignment marketplace, The RealReal, has reported a remarkable increase in fourth-quarter revenues, experiencing a 57% rise compared to the previous year. In addition to this impressive growth, the company has revealed plans to open a new physical store in San Francisco, as well as another location in Chicago.

During the fourth quarter of 2019, The RealReal achieved a revenue of $97.3 million, surpassing the $62.09 million generated the year before. Out of this total, the consignment and service business contributed $80.7 million, while direct revenue reached $16.6 million. Furthermore, the company managed to reduce its net loss to $21.4 million for the quarter, compared to $22.2 million in the previous year.

In terms of the full fiscal year of 2019, The RealReal recorded a total revenue of $318.0 million, marking a substantial 53% increase compared to the previous year. Consignment and service revenue accounted for $267.4 million, whereas direct revenue achieved $50.6 million. However, the company did report a net loss of $96.7 million for the year.

Julie Wainwright, Founder and CEO of The RealReal, expressed her satisfaction with the company’s performance, highlighting that it surpassed $1 billion in GMV in 2019 and made progress towards profitability. Moving forward to 2020, The RealReal expects to continue its upward trajectory, predicting first-quarter revenues between $291 million and $295 million, representing a growth rate of 30%-32%. For the entire fiscal year, revenues are estimated to range from $1.315 billion to $1.345 billion, reflecting a growth rate of 30%-33%.

Alongside its financial success, The RealReal also unveiled plans to open a new store in San Francisco in March. Spanning 8,000 square feet across two floors and located at 253 Post Street on Union Square, this store represents an exciting venture for the company. The RealReal also shared a sketch of the store on Instagram, showcasing its enthusiasm for this expansion. Furthermore, The RealReal has plans to open its largest physical store to date in Chicago during the summer. Stretching across 12,000 square feet and featuring two floors, a café, consignment offices, and valuation services, this new location aims to provide an enhanced shopping experience for customers.

Currently, The RealReal operates three retail stores in New York and Los Angeles, in addition to nine luxury consignment offices. The decision to expand into physical retail aligns with the company’s strategy to capitalize on the growing second-hand fashion market, which is projected to be worth $51 billion within the next five years.

Despite the rise in physical retail, The RealReal faces competition from platforms like Poshmark and ThredUp. For instance, ThredUp has secured partnerships with renowned retailers such as Nordstrom and Gap for pop-ups and resale exchanges. While Poshmark has yet to make a move into physical retail, The RealReal remains optimistic about its future growth and its goal to revolutionize luxury resale while delivering value to both consignors and buyers.

Useful links:
The RealReal website
Market size of the second-hand fashion industry