The trend is improving at The RealReal Inc.
While the consignment retailer saw its gross merchandise value fall 44 percent over the first month of the coronavirus shutdown, the declines have been moderating. GMV fell 19 percent in May and the first week of June saw a drop of 11 percent.
That is still well below the 30 percent growth in GMV that The RealReal logged before shelter-in-place directives took hold, but is a step in the right direction.
The update seemed to help support the stock, which rose 2.5 percent to $15.37 in trading on Tuesday.
The company has said that sales held up as people sheltered in place at home and that the biggest limiting factor to GMV is its ability to process goods coming into its system during lockdown.
“The combined impact of a return to higher staffing levels in its warehouses and efficiency benefits from investments in automation have increased the company’s capacity to process new supply at pre-COVID-19 levels in terms of items per day,” The RealReal said Tuesday. “The RealReal is well positioned to continue recovering as supply trends improve, subject to any new restrictions that may be placed on the company’s operations by local or state government authorities in the future. Supply units shipped to the company’s e-commerce facilities increased approximately 47 percent month over month in May, though supply units are still below pre-COVID-19 levels.”
The RealReal, like other companies, has also been adapting to new realities and has conducted nearly 20,000 virtual appointments since the pandemic started. And the company said interest in its vendor channel from business sellers has increased 10 times compared with before the shutdown started.
“Together, virtual appointments and vendor interest have markedly improved the company’s ability to source supply,” it said.
“Given the return of processing capacity to pre-COVID-19 levels and continued improvements in supply and GMV trends, The RealReal has begun reinvesting in growth as compared with planned expense reductions of more than $70 million as detailed in our Q1 2020 earnings announcement on May 6,” the firm said.
Take that as a consignment green-shoot.