New York-based online luxury resale platform, The RealReal, has reported impressive results for the third quarter, with its gross merchandise value (GMV) rising by 20% to $441 million compared to the same period last year. The company’s total revenue also saw a significant increase of 20%, reaching $143 million.
The RealReal experienced notable growth in its customer base, with a 23% increase in trailing 12-month active buyers compared to 2021. In the third quarter alone, the company processed an impressive 952,000 orders, reflecting a 26% increase. However, there was a slight decline in the average order value, which dropped by 5% to $463. This was attributed to a shift in demand towards more affordable ready-to-wear items, offset by higher units per transaction.
Despite the challenges presented by the business environment, The RealReal has managed to narrow its losses. The company reported a net income loss of $43.7 million for the quarter, showing a significant improvement from the net loss of $57.2 million during the same period last year.
Robert Julian, the co-interim CEO and chief financial officer of The RealReal, expressed satisfaction with the company’s performance. He highlighted the strong demand for ready-to-wear, handbags, men’s fashion, and branded fine jewelry. Julian also emphasized the growth in new buyers and new members, indicating positive trends for the business.
Looking ahead, The RealReal has set ambitious goals for the future. The company projects that it will achieve adjusted EBITDA profitability on a full-year basis in 2024, as well as the Adjusted EBITDA target outlined in its Vision 2025 plan. These targets will be pursued through continued top-line growth, increased cost productivity, and leveraging of fixed costs.
Apart from its positive earnings report, The RealReal recently made headlines with its partnership announcement with global luxury accessories brand, Jimmy Choo. This collaboration allows Jimmy Choo clients to engage in resale for the first time, facilitated by The RealReal.
The RealReal’s impressive performance in the third quarter highlights the strength and potential of the online luxury resale market. As the company continues to attract new customers and expand its partnerships, it is well-positioned to capitalize on the growing demand for sustainable fashion and luxury goods.
Useful links:
1. The RealReal website
2. Jimmy Choo website
