The RealReal is still deeply unprofitable, but it's splurging on physical retail
Say it twice so it sounds cool... The RealReal is the online luxury consignment company that can smell a knockoff Birkin from a mile away. It verifies your fancy second-hand items, prices them, and sells them. But TRR isn't helping you pawn off those $900 Louboutins for free — it takes a big cut of the sale. Despite that...
- TRR shares plunged 13% yesterday after it dropped disappointing quarterly earnings. Sales dipped 10% from 2019, and its quarterly loss more than doubled.
Now TRR is doubling down... on brick-and-mortar stores. The exodus from cities has slashed rent prices, making physical locations more profit-friendly. Last quarter, TRR launched an "innovative neighborhood store format" in Palo Alto, Newport Beach, and Brooklyn. The luxurious locations look like WeWorks merged with airline lounges. TRR is aiming to launch 10 by this summer. But why is an unprofitable, online-focused company splurging on fancy stores?
Wear the trend, don’t let the trend wear you... With the rise of delivery-everything, it's easy to get sucked into pure ecommerce. But TRR knows its customers — and doesn’t think 100% online is their style. TRR is realizing that pairing digital with physical is better: Buyers who shop in stores and online spend 3X more compared to online-only shoppers. And consignors who step into stores bring in 1.5X more product value.