Luxury consignment retailer The RealReal has closed a $50 million growth equity financing round from private equity firm Great Hill Partners. Since its inception, the company has acquired $173 million in funding.
The RealReal will use this latest round of financing to scale operations, category expertise and expand its Luxury Consignment Offices and retail concepts. The RealReal’s CEO and Founder Julie Wainwright revealed in an interview with TechCrunch that the company is developing a brick-and-mortar strategy — starting with a New York City location that is scheduled to open in Fall or Winter 2017. This news comes following the success of The RealReal’s first pop-up store, which opened in December 2016 in SoHo. In two weeks alone, the shop raked in nearly $2 million in sales.
The brand already has three fulfillment centers and six valuation offices, with another on the way. Consignors can visit these offices to consult valuation experts about the pricing of jewelry, watches and other accessories. The valuation process is designed to bring transparency to comparison pricing, especially in a space where item values are often arbitrarily assigned.
In a statement, The RealReal representatives estimated that the company would pay consignors nearly $300 million from the resale of their luxury items in 2017, with the majority spending that money in the primary market. So while the company operates as a secondhand buyer and seller, it believes consumers won’t hesitate to buy items from other luxury brands and retailers.