As our economy continues to evolve and consumers continue to find new enthusiasms, breakthroughs are happening in the way people shop. With the announcement that luxury consignment retailer The RealReal has now authorized the sale of up to $70 million in new shares (which could reach a valuation of $1.06 billion if the company is able to raise the entire amount), it’s clear that innovative ways of selling clothes have caught on in a big way.
The RealReal was founded in 2011 by Julie Wainwright, who is also known as the force behind Pets.com, an early dot.com company that boomed and then went bust. Pets.com is a company that is now very much associated with the idea of the dot.com “bubble,” as the company went from a high valuation to a low one seemingly overnight. Still, the idea of the company was ultimately sound, as the success of Chewy.com, a successful online pet food company, proves.
An Old Idea Made New Again
The RealReal, with its chain of consignment centers and now online sites, is repurposing the idea of re-selling quality used luxury clothes. Many consumers have long used consignment stores as a way to pick up new (but gently used) clothes without paying
ultra-high prices. By seeking out quality luxury brands and reselling them at consumer-friendly prices, this retailer has struck a nerve with consumers who want quality but aren’t willing to pay pre-recession prices. Wainright’s savvy approach to retailing, and her slow-growth business model, have obviously paid off.
The truth is that today consumers want quality for their money, and luxury brands are known for delivering on quality, with designs and materials that last and don’t go out of style. After her experience with Pets.com, Wainright obviously learned how to use the power of the Internet wisely, and to take a slower approach to reaching the right audience.
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