Revenue up, profitability down: TheRealReal crumbles in the quarter

Revenue up, profitability down: TheRealReal crumbles in the quarter

Revenue up, profitability down. TheRealReal shares crumble. The second-hand platform is intercepting the desire for the second-hand market, but it shows difficulty in creating profits. Meanwhile, the organization is looking for a designer: somebody to entrust the “leadership of the conceptual development and product lines within the TRR segment (private label”. Is it the first step to launch its own brand?

Private label

TheRealReal is allegedly taking a big next step. After having been the protagonist of the resale segment, it plans on repeating its strategy on fashion. The consideration is confirmed by the announcement that the company made on its website. TheRealReal is about to hire an internal Sr. designer with the apparent goal of launching its own private label. That being said, a representative of the organization told WWD that the designer will manage a special project focused on “a more circular future for fashion”. The US-based news source though believes this to be a permanent initiative.

TheRealReal’s shares crumble

The company must first worry about increasing profitability. TheRealReal closed its first quarter with 98.8 million USD of revenue (+27% on yearly base), which was above the analysts’ expectations of 95.9 million. The volume of the goods sold amounted to 327 million USD, also up 27%. Even so, the quarter closed with a net loss of 56 million USD. The earnings’ announcement, coupled with the announcement of the departure of CFO Matt Gustke and the analysts’ downgrade, penalized the shares’ performance on the market.

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