Julie Wainwright, ceo, The real real, on millennials.

The resale rocketship that is The RealReal Inc. continued to grab market share in the third quarter — but has yet to transfer the momentum it sees in sales to the bottom line. 

The company’s net losses expanded fractionally to $25.3 million, or 30 cents a share, for the quarter, in line with what analysts projected. 

Revenues for the three months ended Sept. 30 shot up 55.3 percent to $80.5 million, above the $75.9 million Wall Street expected. The gross merchandise volume represented in those revenues rose 48 percent to $252.8 million. 

Julie Wainwright, chief executive officer and founder, described the third quarter as “very strong” and noted that the company saw accelerating revenue growth and “increased leverage in marketing as well as operations and technology.”

She said the increase in traction “speaks to several unique aspects of our model, including high buyer repeat rates and our flywheel where buyers become consignors and consignors become buyers.”

On a conference call with analysts, she added that the company was making progress on its “march toward profitability.”

As sales and users grow, the company is working to keep its expenses in check and Wainwright pointed to the increasing use of automation to help the platform set prices, produce written descriptions of  goods and touch up photos of the goods on offer. 

For the past 12 months, the number of active buyers on The RealReal expanded by 43 percent to 542,987.

The resale company upped its outlook for full-year gross merchandise volume to a range of $997 million to $1 billion, up from the $974 million to $988 million forecast in August. 

Wainwright found and successfully tapped into a rich vein in the fashion world, treating the closets of luxury consumers as a source of supply and delivering a high-end experience with used goods. 

The concept also plays into the theme of sustainability, which is becoming more entrenched in the industry’s collective consciousness. 

While some brick-and-mortar retailers are getting into the resale game, not all brands are on board. While Stella McCartney and Burberry have each embraced The RealReal and offering customers incentives to sell their brands on the platform, others — importantly Chanel which has sued The RealReal and raised complaints about its authentication process — have resisted.  

The exact impact of The RealReal on the fashion ecosystem is still up for debate — it’s prompted some luxury shoppers to buy new with an eye toward selling later, while surely others have skipped past full-price retail to indulge in resale experience.

Wall Street, which has applauded the entry of a new retail business model into a scene badly in need of some life, is nonetheless taking something of a wait-and-see approach toward The RealReal. The stock priced at $20 in its late-June initial public offering and shot up to $28.90 on its first day, but since then the issue has fallen back to $21.73. Over that same period of time, the S&P 500 has gained 4.3 percent as it pushed to new heights.

Wainwright sounded notes of confidence on the call and continued to play the part of the foremost resale cheerleader. 

Asked whether StockX, which sells vintage sneakers with a market approach, was a competitor, the ceo noted StockX was still a site where users self-posted items for sale. 

The two sites do have different approaches to making sure the goods sold on their platforms are the genuine article. While StockX authenticates the goods after they’re sold, but before they get to the buyer, The RealReal takes the goods upfront and authenticates before posting them for sale. 

But Wainwright suggested any other player that is authenticating goods and expanding the reach of resale is a positive.

Wainwright described The RealReal’s biggest competitor as “inertia.”

“That inertia is overcome when we’re doing everything we can to [help consumers] understand that there’s almost $300 billion of trapped value in their closet,” she said.

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