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The RealReal began offering curbside service amid the pandemic.
AP
The RealReal is forging ahead on its path to recovery — but it’s not enough to impress Wall Street.
The San Francisco-based luxury consignment shop revealed quarterly earnings Monday after the market closed, falling short on top-line revenues and widening its losses by more than $43 million. Company shares fell by more than 10 percent in after-hours trading as a result.
Still, Julie Wainwright, founder and chief executive officer of The RealReal, pointed out in a statement that, “improving trends in New York City and Los Angeles, momentum with virtual appointments and continued strength in the The RealReal [business-to-business] vendor program improved our ability to source supply in Q3 and contributed to improving quarter-over-quarter [gross merchandise value] trends. We were pleased with our [gross merchandise value] performance in Q3 despite the difficult [year-over-year] comparison and continued COVID-19 headwinds.”
For the three-month period ending Sept. 30, revenues were $78 million, down from $81.5 million the same time last year, causing a loss of $43.3 million. That’s on top of the $25.2 million loss in 2019’s third quarter. (The RealReal also logged a loss of nearly $43 million in the second quarter.)
The site, which sells luxury clothing, handbags and accessories, began online in 2011. (The firm began trading on the public market eight years later.) But before that, The RealReal took the shopping experience off-line with its first brick-and-mortar store in November 2017. It now has five physical locations — two in New York City, one in Los Angeles, one in San Francisco and the latest, which opened last month, in Chicago — along with 10 consignment offices where customers can drop off products, get appraisals or pick up orders.
Like other retailers, The RealReal was forced to temporarily close physical locations in March to prevent the spread of the coronavirus. In April, the company pivoted to online consignments. In June, the company said it has conducted more than 25,000 virtual appointments since the pandemic started.
The company also launched The Gucci x the RealReal Shop online in October, a partnership that will span the rest of 2020. The store features a mix of products directly from Gucci, as well as Gucci products from third-party consignors.
The RealReal ended the quarter with more than $395 million of cash and equivalents and short-term investments. The company’s stock, which closed up 4.03 percent to $16.25, is down more than 11 percent year-over-year.
