Following a barrage of negative press, The RealReal CEO Julie Wainwright is speaking out regarding allegations that the luxury consignment marketplace sells counterfeit merchandise on its site. In an email sent to customers and consigners yesterday afternoon, Wainwright wrote that the company — which differentiates itself with the pledge that all of its merchandise is 100 percent real — “strives for perfection but may not be perfect every single time.” She urged customers to send back items if they had concerns about authenticity.
Wainwright’s message comes one day after CNBC reported the findings of its investigation into the company. CNBC said it spoke with more than three dozen former employees, polled disgruntled customers, and obtained internal company documents that indicate that not everything on The Real Real’s site is properly authenticated by an expert. A deep dive into nearly 1,400 online reviews also revealed that fakes, damaged items, mistakes and poor customer service are common complaints.
The revelations are surprising considering The Real Real — which launched in 2011 and went public in June, raising an impressive $130 million — hinges its very brand identity on the promise that it goes above and beyond its competitors to ensure its merchandise is authentic. Indeed, Wainwright in past interviews has firmly declared that there are no fakes on the site.
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Now, the CEO is on the defensive, dismissing the recent media coverage as “attempting to discredit the business we have proudly built.” “This is a complex problem,” she wrote in her email. “The entire team at The RealReal works diligently seven days a week to ensure the highest standards in our authentication process. We are constantly and consistently training our teams, and evolving our technologies to ensure your items are the real thing. There is no other resale company doing more to remove fakes and put counterfeiters out of business than The RealReal.”
Wainwright added that her company employs “certified experts such as gemologists and horologists, luxury experts who have worked at companies like Sotheby’s and Christie’s, and brand experts who have worked directly with luxury brands.”
Yet CNBC’s investigation uncovered company documents from 2018 that it suggests indicated copywriters in the Secaucus, New Jersey, warehouse are among those tasked with authenticating some of the items that go on The RealReal’s site. These copywriters told CNBC they were given very little training on how to actually spot fakes.
Luxury brands have also called into question The RealReal’s authentication process. Last year, Chanel hit the company with a lawsuit, accusing it of selling counterfeit Chanel products. In the filing, the French brand also alleged that the consignment site does not have the authorization to authenticate its goods.
While The RealReal posted positive third-quarter earnings results this week — sales jumped 55 percent to $81 million, up from $52 million in the same period a year ago — its stock took a hit in the wake of the CNBC report. Shares on Wednesday fell more than 7 percent.
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