Dive Brief:
- The RealReal on Monday said President and Chief Operating Officer Rati Sahi Levesque, who helped found the luxury resale site in 2011, has replaced John Koryl as president and chief executive officer.
- Koryl, who took the CEO post in February 2023, has left the resale marketplace and no longer serves on its board, according to a company press release.
- The company also provided preliminary Q3 results that it said exceeded its expectations, and raised its guidance for the year.
Dive Insight:
The RealReal continues to see turnover in its top ranks as profits remain elusive. In its most recent quarter, net loss narrowed to $17 million from $41.3 million in Q2 last year.
Two years ago founder Julie Wainwright abruptly resigned as chief executive officer. At that point, Levesque and then-Chief Financial Officer Robert Julian took over her responsibilities until Koryl’s arrival months later. About a year ago, The RealReal announced Julian would exit the company.
Now Levesque is taking the reins. In her 13 years with the company, she has had leadership positions in various areas including sales, merchandising, product and technology, operations and marketing, and “has been instrumental in setting [its] strategy and positioning,” The Real Real said in its release. Before becoming COO, she served as chief merchant, the company said.
Like online resale site ThredUp, The RealReal has tweaked its model to boost profitability. Both marketplaces have leaned into consignment and searched for alternative revenue sources. At ThredUp that has been its resale-as-a-service tech, while The RealReal launched an advertising program. The RealReal also exited its beauty business.
Both companies may be running up against the limits of online resale, amid evidence that selling secondhand goods is operationally easier and more profitable via brick and mortar. On Monday, Levesque said the company’s “growth playbook, which is centered on unlocking supply, is working with proof points in both top line and margin metrics.”
“The RealReal is positioned well as the leader in luxury resale with significant room to grow,” she said. “Our strong third quarter results are an important step as we focus on growing our business profitably.”
A full Q3 report will be released Nov. 4, the company said. UBS analysts led by Jay Sole believe “there are many more positive data points than negative ones,” including web traffic growth of 24% year over year and 4,410 basis points from Q2. Unique visitors declined 1%, but rose 910 basis points from Q2, and app downloads and total sessions also grew year over year, according to UBS.
For the year, the company now expects gross merchandise value to reach $1.81 billion to $1.83 billion, from prior guidance of between $1.79 billion and $1.82 billion; total revenue to reach between $595 million and $602 million, up from between $580 million to $595 million; and adjusted EBITDA to reach between $4.5 million and $7.5 million, up from zero to $6 million.
