The RealReal is a popular online website that gained notoriety because of selling expensive designer goods that are second hand. Now, the second hand website would like to raise more capital to expand their business. Julie Wainwright is the founder and CEO of the RealReal and has big plans for her company. Her big plans begin with raising another 100 million dollars before an IPO occurs. Insiders believe that the reasoning behind raising new capital is due to the fact that the company only appeals to private investors. It will take more time and capital to draw the interest of the public investor.
The fact is that the second hand market for luxury or designer goods is growing. Certainly, the RealReal private investors are aware of this fact and probably anticipate that the growth will lead to a great return on their initial investments with the company. Furthermore, they are assuming that the RealReal will corner the market in selling the second hand luxury goods.
Consignment Shop Model
Here is something that is interesting to note. The RealReal using the consignment shop business model to sell their designer goods. The seller supplies the high ticket item to the RealReal. The company places the item on their website for sale. The company and the seller share the profits, which involves about 50 to 60 percent going to the seller.
The RealReal is basically an online consignment shop. The founder of the company is Julie Wainwright. The company has about 800 employees and valuation offices based in San Francisco, New York, L.A., Chicago, and Washington, D.C. which allow the seller to have face to face negotiations with a representative of the RealReal. Julie Wainwright, the founder of the company also has plans to open several brick and mortar stores across the country. She is planning for the first brick and mortar store to open in New York City. Many luxury brand companies are now viewing the RealReal in a very positive way because they’ve brought more attention to their luxury brand items and driven up their sales too.”