The RealReal reportedly mulls IPO
The RealReal is in discussions with investment banks about launching an initial public offering later this year, according to Reuters, which cited unnamed sources.
The upscale resale site has sent out requests for proposals to advisors and underwriters that might manage an IPO, Reuters reports.
With the summer close of $115 million in Series G financing, The RealReal so far has raised a total of $288 million. The e-retailer declined to comment to Retail Dive on the Reuters report.
Like e-marketplace Farfetch, which went public last year, The RealReal has staked out its share of the high end of e-commerce, in its case in the lucrative online resale market.
Founded in 2011, The RealReal claims to provide the largest selection of pre-owned, authenticated, luxury items — including women's and men's fashion, fine jewelry, watches, fine art and home goods. The company validates the bona fides of its second-hand goods through an authentication process. Although many brands have blessed its operations, Chanel has challenged its assertions through a lawsuit filed last year alleging that the retailer's guarantees are inadequate, to the point where the resale site has sold fake Chanel handbags — claims The RealReal told Retail Dive it "unequivocally rejects."
Authentication is key to the reputation and sales of expensive goods. Stadium Goods, acquired by Farfetch in December, touts a similarly careful system for its rare and collectible sneakers, and marketplace eBay seemed to respond to The RealReal's authentication challenge earlier this year by expanding its own.
And those sales are growing. So-called "re-commerce" upstarts are growing 20 times faster than the broader retail market and five times faster than off-price retailers, which offer a similar treasure hunt, according to Coresight Research. The total U.S. apparel resale market will grow at a compound annual growth rate of 13% from $18 billion in 2016 to $33 billion in 2021, according to that research. Clothing, shoes and accessories currently make up 49% of total U.S. resale sales, according to Coresight.
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