The RealReal Emphasizes Value of Luxury Items

Since several years ago, Julie Wrainwright, CEO of The RealReal, has been saying that the latest private funding round for her company will be the last, only to secure more private funding. Several sources have said that Wrainwright’s current goal is to raise $100 million more in funding. Since its launch in 2011, The RealReal, a secondhand luxury clothing and accessories company, has already earned $170 in private funding.

The eventual IPO round for The RealReal will involve opening up the doors for public investors and acquirers to buy stock in the company, and there are many reasons that The RealReal may be remaining private at this time. One such possibility is that they do not believe their company is appealing enough as it is to acquire private investors, and that it needs more time to prove that it can be a valuable long-term business. Another possibility is that they have realized just how big the market for secondhand luxury goods is, and they believe that if their company invests more in growth, that will result in them eventually having a bigger market share.

The RealReal started up as merely a women’s luxury clothing company, but since its inception in 2011, it has branched out, including menswear, art, and home decor in its stock, along with of course women’s’ accessories. It also has moved from being exclusively an online company to having a physical location in New York City, and hoping to have more physical locations in the future. And while some may worry that luxury consignment stores reduce the sales of designer brands, this is not true at all. In fact, The RealReal has actually been driving sales of designer brands, both because someone will buy something first-hand from a brand they already loved a secondhand clothing item from, and because knowing that a clothing item has resale value can encourage investing significant money on it. The company also has a strict policy for detecting fake items, and holds themselves accountable – they once returned a $100,000 pair of diamond earrings that had accidentally been left in the store.

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