How The RealReal Cashes In on Pre-Owned Luxury Brands
Resellers of designer clothing and apparel say there's no reason to be closeted about buying and selling pre-owned luxury wearables. The RealReal consignment company is cashing in on the trend.
Photo: Lydia Randall/WSJ
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(light piano chords) - [Announcer] The Real Real, a luxury consignment company with names like Hermes, Gucci, and Stella reign supreme. The recently publicly listed company says it's revolutionizing resale and expects to sell nearly $1 billion in luxury goods this year in retail stores and online. Anyone can consign by shipping to the company, dropping of at one of their consignment offices, or depending where you live and how much you're consigning, from your own home. Gavin Waters is one of the Real Real's so called luxury managers tasked with these home visits before the items are authenticated and listed for sale on the site. - Hi. - Hello. - So good to see you. - [Announcer] On this day, he's consulting with Erin Hazelton, a writer who is one of the Real Real's VIP consignors. - You see anything here that screams, get out of my closet? This is a Chanel. - Okay. You know, I kind of love this. - So what about this Victoria Beckham bag? I hardly used it, but I love it. - I think this half moon shape is sort of on the decline so I would do it now before it's an even lower price. - I don't like getting rid of Alaia, but I think it's time. - This is a hard one. - So I feel like you know that rule if you've had it for two years and you haven't worn it. - It's time to go. - Yeah. - So what I'm looking for when I'm going through a consignor's pieces is definitely the brand value. I think if it's a brand that's super hot right now like Gucci, Balenciaga, Dior, it definitely helps to go onto our marketplace. But I think cut also has a big thing to do with it. What's the story with this? - So, last year when I finished treatment for breast cancer, this is the outfit I wore to ring the bell. I get to do the first one. Ready? (bell ringing) It's all Xs, goodbye cancer. - That's gonna be in the collection forever, of course. - But then there's a pair of pants that I wore the first day of chemo. I don't know if I need to keep them. - Not that that's memory. - You know what, goodbye. Goodbye. - I'd rather not have these here. I think when describing Erin's collection, you see so much of her personality and the fun pieces, the serious pieces, the dramatic pieces. It's really sophisticated. The materials, the quality are all incredible, but there's a large sense of fun with her. When you know Erin and you see her dressing, I think it just is such a personification of who she is and the life that she brings to everything. - It was really beautiful. - Oh, I think it's true, no, I think it's such a privilege. - You're so nice. Who knew I would get emotional about clothes. - That's a personal thing. I mean, I think, you know. - My other children. - You go a lotta kids in here. - Seriously. I have been consigning for four years. I consign a lot so I have VIP status which means I get 70% return on any item that's over $200. Sometimes I get 20 bucks, sometimes I sell things and I get a lot more than that. These shoes for sure, I'm ready to part with. - (mumbles). - Oh no, don't do that to me. - I know, I always make you second guess. - I was excited about doing Ebay, but just the work of like shooting it, dealing with people. - I get to keep it. - The Real Real takes a cut, but you don't do anything. Gavin comes here, takes the stuff, done. - [Driver] Hello. - The pieces I got from Erin today as always a great assortment. She's a smaller size which definitely helps. We got some Alaia pieces. Alaia sells really really well on our platform. It has a very strong almost cult following for the cut and the design. Those pieces are fairly close to retail and they sell pretty consistently on our marketplace. - [Announcer] The Real Real has three brick and mortar stores in New York and Los Angeles and 11 luxury consignment offices across the United States. Authentication is an essential part of the company's strategy with its 100% authenticity guaranteed promise. - I just left on of my VIPs. I want to see if you have a chance to look some stuff over. - Sure, yeah, drop it off. - Perfect. - [Announcer] The Real Real says it authenticates thousands of items per day. - Authentication is paramount to our business we're called the Real Real. It's so important that we put it in our name twice. Guaranteeing that everything we sell is the real deal, the legit article is so important. Authenticity is what differentiates us from a lot of other players in the market. - [Announcer] But the Real Real's authentication strategy has ruffled some feathers. French fashion house Chanel has sued the Real Real accusing the company of selling fakes. Chanel's website states that there is only one way to ensure that articles are genuine, purchase them only in Chanel boutiques or from retailers authorized by Chanel. The Real Real says it unequivocally rejects Chanel's claims and will continue to accept pieces from all in demand luxury brands. Wetzbarger inspects one of Erin Hazelton's dresses, the Alaia. - You wouldn't necessarily think that a brand like Alaia would be counterfeited, but it absolutely is. On an inferior counterfeit piece, they would have fewer seams, fewer pieces, to make it cheaper and faster. Often times on counterfeits, they'll use letter sizing, small, medium, large, extra large. But most French and Italian brands will use European sizing, 38, 40, 42, et cetera. So that's something to look out for. I've been in luxury resale for a long time and it started off as everyone's dirty little secret. Even consignors and customers didn't want to talk about it. But now people are proud and they're sharing their success stories. And brands are starting to come around too. They know that if there's equity in their products in the secondary market, then their product is more popular in the retail market. You're not gonna buy a car you can't resell, you're not gonna buy a house that depreciates in value. It's the same way with fashion, people are making savvy investment decisions in their wardrobe knowing and thinking about the resale value. (upbeat contemporary music) - I think people are just slowly becoming more conscious about the environment. Clothes don't break down and you can donate them. But if they don't sell, they go into, you know, an landfill somewhere and sit there for years and years and years. Isn't that amazing? - Wow. I mean, (mumbles), that is amazing. - It's better than just sitting in somebody's closet. At least somebody else gets to wear it and feel good in it. You know what I mean? It has a second life. It's like I guess, a piece of art.