Luxury consignment shop The RealReal made a triumphant debut today on the Nasdaq, becoming the first player in the resale market to go public. It priced its shares at $20 each, above the anticipated range of $17 to $19, and raised $300 million in its initial public offering.
At market close on Friday, the San Francisco-based company, trading under the ticker “REAL,” was up 45% to $29.
It marks a milestone for the re-commerce sector, comprised of companies such as Poshmark, ThredUp and Depop. (The former is speculated to file for an IPO this fall.) As more and more customers make the case for high-end goods at non-luxury prices, a number of secondhand sellers are looking to cater to these shifting demands.
According to a report from Coresight Research, the resale market is growing 20 times faster than the general retail market, and the total U.S. apparel resale market — brick-and-mortar plus online — is on track to be worth $33 billion by 2021.
“It’s still in the early days, but there’s a level of excitement around this new offering within the retail space,” said Alex Fitzgerald, a manager in the consumer and retail practice at global strategy and management consulting firm A.T. Kearney. “The RealReal’s IPO really captures the market’s sentiment about the growth of this model and can really institutionalize this concept.”
Adding to resale’s big week is sneaker marketplace StockX’s announcement two days ago that it had picked up $110 million in Series C funding, pushing its value to $1 billion. (Along with the news, co-founder Josh Luber passed on his role of CEO to former eBay executive Scott Cutler.)
“The opportunity in front of us is really the interesting part of this,” Luber told FN. “We’re just starting to scratch the surface on how big and powerful this model can be to not only the resale customers but also the retail customers.”
Although thrift shops and even pioneering e-commerce platform eBay have been around for some time, the new batch of resale marketplaces present shoppers with a treasure-hunt experience that aren’t easily replicated at traditional retail stores — from providing limited assortments at lower-than-retail prices to offering fresh and rotating merchandise at a near-daily basis. (Off-price models like TJ Maxx have been able to capitalize on this offering in a brick-and-mortar format.)
Even household names like Neiman Marcus have seen a growing interest in resale. In April, the department store chain took a minority stake in online consignment market Fashionphile, becoming the first major luxury retailer to directly invest in resale.
“Over half our customers already engage in pre-owned luxury, and this exclusive partnership exemplifies our commitment to providing our customers with services and offerings they want and need,” said Neiman Marcus CEO Geoffroy van Raemdonck.
Fashionphile co-founder and CEO Ben Hemminger added, “Customers are approaching luxury in new ways, and pre-owned is at the center of that shift.”
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