The RealReal, a leader in the booming luxury resale market, has announced a major leadership shift as Rati Sahi Levesque takes over as CEO following John Koryl’s departure. Koryl, who served as CEO for less than two years, exits amid a transformative period for the company and the broader resale fashion industry, which is projected to grow at a compound annual growth rate (CAGR) of 12% from 2023 to 2030, reaching a market value of $350 billion by 2030, according to ThredUp’s 2023 Resale Report.
The luxury resale segment, in particular, has seen explosive growth, driven by increasing consumer demand for sustainable and affordable high-end fashion. The RealReal, which reported 1.7 billion gross merchandise value (GMV) in 2022, has been a key player. However, the company has faced challenges, including narrowing its net loss to 17 million in Q2 2024, down from 41.3 million in the same period last year.
As Rati Sahi Levesque, a co-founder and longtime executive, steps into the CEO role, The RealReal aims to capitalize on the growing resale market while addressing operational hurdles and positioning itself for long-term profitability. This leadership change is pivotal for the company as it navigates an increasingly competitive landscape and evolving consumer preferences in the luxury resale sector.
Key Takeaways
- Rati Sahi Levesque, a co-founder, replaces John Koryl as CEO.
- Koryl's tenure lasted less than two years, marked by financial struggles.
- The RealReal reports improved Q3 results and raises its annual guidance.
Leadership Transition
Rati Sahi Levesque, who has been with The RealReal since its inception in 2011, has become the new CEO. She previously served as the company’s President and Chief Operating Officer.
"The luxury resale market is vibrant and growing, and here is a significant opportunity to leverage our powerful brand, our talented team, and our valued community of consignors and buyers to enhance the client experience and accelerate profitable growth," Rati Sahi Levesque, President and CEO of The RealReal.
Levesque has a rich history with the company, having held various leadership roles in sales, merchandising, product and technology, operations, and marketing.
In a LinkedIn post, The RealReal stated, "The RealReal is pleased to announce that Rati Sahi Levesque has been appointed President and CEO and a member of the Board, effective today. During her 13-year tenure and since the founding of the Company, Rati has been instrumental in growing and scaling The RealReal into the world’s largest and most trusted resource for authenticated luxury resale."
John Koryl, who joined The RealReal as CEO in February 2023, has stepped down and is no longer part of the board. His departure follows a series of company leadership changes, including founder Julie Wainwright's abrupt resignation two years ago.
Financial Performance
Despite the leadership shakeup, The RealReal has reported preliminary Q3 results that exceeded expectations. The company has narrowed its net loss to $17 million, down from $41.3 million in the same quarter last year. This improvement comes as the company continues to refine its business model to achieve profitability.
The RealReal has raised its guidance for the year, now expecting:
- Gross merchandise value between $1.81 billion and $1.83 billion.
- Total revenue between $595 million and $602 million.
- Adjusted EBITDA between $4.5 million and $7.5 million.
For more details on The RealReal’s financial performance, visit their investor relations page.
Strategic Shifts
In response to ongoing challenges in the online resale market, RealReal has made strategic adjustments. Like competitors like ThredUp, the company focuses on consignment and explores alternative revenue streams. Recently, RealReal launched an advertising program and exited its beauty business to streamline operations.
Levesque emphasized that the company’s growth strategy is centered on unlocking supply, which has shown positive revenue and margin metrics results. She stated, "The RealReal is positioned well as the leader in luxury resale with significant room to grow."
Market Outlook
As The RealReal navigates its leadership transition, analysts remain cautiously optimistic. UBS analysts noted that there are more positive indicators than negative ones, including a 24% year-over-year increase in web traffic. While unique visitors have slightly declined, app downloads and sessions have grown.
The full Q3 report, which will be released on November 4, will provide further insights into the company's performance and future direction. As Rati Sahi Levesque takes the helm, all eyes will be on The RealReal to see how it adapts to the evolving landscape of luxury resale.
