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The RealReal picks up another $50 million on path to luxury consignment domination.
In what's turning out to be an epic battle for category dominance, online luxury consignment store The RealReal has added even more cash to its kit. The company announced on Tuesday that it has secured $50 million in funding from private equity firm Great Hill Partners.
Founded in San Francisco in 2011 by chief executive Julie Wainwright, The RealReal has now raised a total of $173 million and plans to pay its consignors — they keep almost 70 percent of the sale price of their luxury items from labels such as Gucci and Rag & Bone — almost $300 million in 2017.
“We are in investment mode,” said Wainwright, who declined to share revenue numbers. She plans to use the funding to expand The RealReal’s physical presence through concept stores and “luxury consignment offices.” Like many other digitally-native shops, the company is turning to brick-and-mortar to attract new customers and more inventory, which is always a concern for consignment model retailers.
Currently, the company has six consignment office locations around the country where a team of full-time gemologists and experts (55 people and growing) are on hand to authenticate potential sales for customers.
“We are moving aggressively into the fine jewellery and watch market, and we’ve been doing it by bringing our experts forward,” she said. “People do have that discussion [with the authenticators] and if they don’t consign on the spot, they are ready to sell it, they shop it around and they always come back because it’s so transparent. So that has yielded a phenomenal success for the business.”
The RealReal also plans to open its first permanent concept store this year in New York, following the success of a pop-up in the city last year. Wainwright says the store registered with new shoppers and consigners and helped build The RealReal’s brand identity as a trusted place for authentication.
Unlike European competitor Vestiaire Collective — which raised $62 million in January, fuelling a competitive re-commerce market — The RealReal photographs inventory itself, though both verify product before it is sold. Future stores will also have experts on hand to evaluate product.
“Having the capital to back [the brick-and-mortar growth] up is important for us,” said Wainwright, adding that online will always be the primary sales channel. “Ebay is still the number one [online reseller], but we know we are making significant inroads and we are also expanding the market,” she said.
Wainright said the company has revised its target date for profitability, originally planned for 2015, to achieve “greater expansion” and that her biggest concern is maintaining service levels as The RealReal grows. “When you have really rapid growth, it really is about: how do you manage that growth and have excellent execution on every area business?” — Chantal Fernandez
The Yoox Net-a-Porter Group has adopted a company-wide no-fur policy.
Net-a-Porter has been phasing out fur for over a year, however this formal policy will ban clothing and accessories made from animal fur across all of the YNAP group's sites, including Mr Porter, Yoox and The Outnet.
The move is part of the group's commitment to sustainability, and builds on a longstanding relationship with The Humane Society International (HSI) and Lega Anti Vivisezione. YNAP has also joined the international Fur Free Retailer Program supported by the Fur Free Alliance, joining Giorgio Armani, Hugo Boss, Zara and Asos.
We have a strong sense of responsibility and recognise the importance of making a positive contribution to society," said Matteo James Moroni, head of sustainability at YNAP in a statement. "With a range of initiatives, partnerships and innovations, our goal is to act as an industry-wide catalyst for change.”
"YNAP is one of the world’s leading online retailers for high fashion so this decision is sending an extremely strong message to the dwindling number of top designers that use animal fur, such as Prada, Burberry, Gucci and Michael Kors," said Claire Bass, executive director of HSI. "This is a huge retail door slamming in the face of the fur industry, reflecting the growing consumer belief that cruelty has no place in fashion and strengthening the business case for investment in fake fur alternatives."
Certainly, the issue of fur has long divided the fashion industry. While many within the fashion community will support YNAP's position, there is a strong contingent that continues to endorse the use of animal pelts. The global fur trade is worth $30 billion, according to a press release last week from the International Fur Federation, and there was an 8 percent increase in the use of fur at London Fashion Week during the Autumn/Winter 2017 season. — Tamara Abraham
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