The RealReal

The RealReal on Wednesday named John E. Koryl chief executive officer.
Previously an e-commerce and digital executive at the Canadian Tire Corp., Koryl will take over as CEO and join The RealReal’s board on Feb. 6. He held a previous executive role at Neiman Marcus, helping to modernize the retailer’s omnichannel experiences as president of stores and online of Neiman Marcus Direct. He is also a board member of Dubai-based holding company Al Tayer Group whose retail division, Al Tayer Insignia, hosts a portfolio of brands including Bloomingdale’s, Armani Outlet, Coach and the like.

In a statement, Koryl expressed his enthusiasm for joining the company, saying The RealReal has “significant opportunity to capture even more market share in the quickly evolving and fast-growing resale industry.” In this role, he will focus on “streamlining the company’s operations to improve overall client experience, achieve cost savings, and lead the company to profitability.”

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His appointment comes at a time when resale darlings are chasing profitability, cutting costs (charging for clean-out kits in the case of ThredUp), changing the selling experience and no longer accepting some midpriced luxury brands (Theory, as a recent example) in the case of The RealReal. The RealReal also made a tune-up to its “Consignment Concierge” service with a frequent texting strategy by its acquisition team underscoring a push for home closet clean-outs as the company looks to localize sourcing.

Executive shifts look to be minimal, as the company’s co-interim CEOs, Rati Sahi Levesque and Robert Julian, will remain at The RealReal, with Levesque as president and chief operating officer and Julian as chief financial officer.

Still, challenges remain for the luxury consigner. As outlined in its financial reports, The RealReal has seen trials in the form of pandemic-led store closures, the pivot to virtual consignment, high number of returns post-holiday and high cost of acquisition. Per its 2021 financial report, the company reported net losses of $98.4 million in 2019, $175.8 million in 2020 and $236.1 million in 2021.

When The RealReal went public in late June 2019 at $20 a share, the stock soared 45 percent higher to close at $28.90 on its first day of trading. Fast-forward to its stock price in June, which was just $2.49. At news of the new CEO on Wednesday, the stock opened at $1.38, per Yahoo Finance data.

In a statement, The RealReal’s lead independent director Rob Krolik underscored the “important point in the company’s evolution,” which Koryl is poised to lead. “He has extensive experience as an e-commerce and omnichannel executive driving operational excellence and profitability. This experience, combined with his proven track record of successfully developing and growing online businesses, make him the right person to lead The RealReal.”

Resale and the City?
Darren Star, the American television wiz behind “Emily in Paris” and “Sex and the City,” is among three new investors in French luxury resale site Resee, WWD has learned.

The others are American tech entrepreneur Shari Glazer, founder and chief executive officer of Kalos Labs, and Michael Dayan, a cofounder of French e-commerce pioneer Showroomprive.com, a former owner of Sonia Rykiel and a frequent tech investor.

“I’ve been following the Resee journey for years,” Star told WWD. “I was attracted by the appeal of curated vintage fashion, but most of all by the level of taste and intelligence behind the brand.“

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Figures from the entertainment world have recently become active investors in fashion and beauty firms, applying their wealth, fame, credibility and consumer insights to help brands grow.

According to Resee, the trio of experts from various fields will “support the company’s exponential growth at the heart of the very buoyant secondhand market.”

Financial terms were not disclosed, but it’s believed the investments total in the single-digit millions.

In a statement, Resee cofounders and majority owners Sofia Bernardin and Sabrina Marshall said the new funding round would help accelerate its international expansion, burnish its global sourcing capabilities and help it invest in the necessary tech to optimize its capabilities.

Expansion will next focus on Switzerland, Hong Kong and Singapore. France remains a key market for Resee, and it recently opened at showroom on Avenue Kléber in Paris.

Next week, it plans to open a monthlong pop-up shop at the Carlyle Hotel in New York City. The U.S. was Resee’s largest market in the first half of 2022, accounting for 38 percent of sales.

The company is gunning to reach sales of 25 million euros by 2025.

While smaller than rivals like Vestiaire Collective or The RealReal, Resee boasts an average basket of 1,161 euros.

A Prada look from the Resee site.

Courtesy of Resee

Founded in 2013, it specializes in such covetable fashion items as Hermès handbags, archival Alaïa and runway pieces from Karl Lagerfeld-era Chanel and Phoebe Philo-era Celine. Its roster of notable resellers include actress Catherine Deneuve, jewelry designer Gaia Repossi, fashion designer and painter Vanessa Seward and creative director and consultant Vanessa Traina.

In tandem with its new investors, Resee said it is setting up an advisory board to support the brand’s development. Among new members are Sébastien Fabre, cofounder and former CEO of Vestiaire Collective.

Buoyed by strong global demand for vintage and secondhand high-end goods, the company has been logging revenue growth of about 120 percent each year, and boasts that it has been profitable from the get-go.

The global secondhand apparel market is forecast to grow by 127 percent to $218 billion by 2026, three times faster than the global apparel market overall, according to the “2022 Resale Report” by online resale platform ThredUp.

Is The RealReal launching a fashion brand?
WWD has learned that the consignment website — best known for selling the fashions of other companies — is in the process of hiring a senior in-house designer, with the apparent goal of launching a “private label.”
Judging from a job posting on The RealReal’s own site, the designer position, which will be based in either New York or San Francisco, will set the “overall direction in the conceptual and final development of product lines within TRR (private label),” describes the listing.
The company says it is “Seeking a seasoned designer with end to end experience in the entire design process from market research to sketch, specs and fit. The senior designer will help launch a series of strategic initiatives around sustainable product development and upcycling. Deep knowledge of product development, construction and finishing techniques is essential. This role requires a strong track record of product design from well known luxury brands,” the listing reads.

A representative for The RealReal, however, wrote off the job as more of a special project-based position. “We’re always looking for opportunities to increase our impact when it comes to creating a more circular future for fashion. Adding design talent to our team will help us explore potential avenues for sustainable creation that keep existing products and materials out of landfills and in circulation, including expanding our new ReCollection upcycling program,” the spokesperson wrote to WWD in an email.

The RealReal declined further comment about the nature of an in-house design project. For the past few years the company has enlisted emerging brands to release capsule collections on its site using upcycled or sustainably sourced materials. But in those cases, it is understood that the brands were in control of the designs for each release, with The RealReal acting as a sales facilitator.
In March, The RealReal dropped the first edition of its ReCollection project, in which unsold goods from brands like Balenciaga, Simone Rocha and Jacquemus are upcycled by a Los Angeles-based creative repairs studio.
At the time, James Rogers, director of sustainability at The RealReal, told WWD: “This is just the beginning. What we think this will look like going forward, we will be planning to build out a library for other designers, so any of the scraps or leftovers from this initial collection will be held onto and turned into part of that library. As we make more ReCollections going forward, they can be used and kept out of the landfill — so really [we’re] thinking about building a repository that is specifically focused on upscaling initiatives.”
The collection, however, was all one-off designs. Much of it remains unsold on The RealReal’s site, where it has been posted since April 1.
The company’s design role opening seems tied to a more permanent initiative. It requires 10 years’ minimum experience at a “reputable luxury brand,” and deep knowledge of development, fit, patternmaking and delivery timetables.
The person would also oversee “selection of fabric and trim from The RealReal-owned inventory and authorized sustainable partners and brands.” For its ReCollection program, The RealReal requires that upcycled pieces must have no virgin fabrications, be zero waste and the labor behind it must be fair wage and sourced in the U.S.

There is also the matter of excess fabric churned out by the fashion industry each season. Traditionally, one could find bolts of custom textiles from brands like Marc Jacobs for sale at New York City Garment District fabric shops. But The RealReal could perhaps take this fabric on and recycle it in cut-and-sew shapes.
This model has long been popular at Urban Outfitters, which has been offering its “Urban Renewal” line of clothes made from upcycled thrift clothes and deadstock fabric for the better part of the last decade.
In August, The RealReal’s chief financial officer Matt Gustke said the pandemic has been a “catalyst” for the company’s direct relationship with brands, reporting a 46 percent increase in items consigned by brands during COVID-19 as they looked to drum up cash from whatever sources they could. In November 2019, Allison Sommer, the company’s director of strategic initiatives, said brands were rapidly coming around to working with resale partners like The RealReal.
The RealReal has become increasingly more choose-y with the pieces it takes on as a consignor — requiring nearly new condition of all the inventory it accepts. Many of the company’s online consignor competitors facilitate a consumer-to-consumer model of commerce — meaning that sites like Poshmark, Tradesy, Vestiaire Collective and Thredup do not hold inventory and that sellers ship directly to buyers.
The RealReal holds inventory and also photographs, authenticates and ships product in-house — requiring a much higher degree of overhead that, at times, has rattled investors. The company has not yet turned a profit — with observers saying that The RealReal’s cost of business, which now includes a sizable retail imprint, is hindering its general success.
Analysts largely declined to comment on the prospect of a fashion line from The RealReal. On Friday, the company’s stock was trading at around $23 a share — about double the per-share price this time last year when The RealReal took a considerable beating from the pandemic as shoppers constricted their purchases of fashion goods.