Upon taking helm as CEO of The RealReal in February, John Koryl implemented a series of changes to help get the company back on track, including cutting about 230 jobs and closing two flagships, in San Francisco and Chicago. Its focus now is on the right product mix.
“During the second quarter, we continued to transition away from company-owned inventory and consigned items that sell for under $100, which are not profitable for The RealReal,” Koryl explained in a press statement. “These actions resulted in higher average order value, a higher gross margin rate, reduced company-owned inventory, and a smaller adjusted EBITDA loss compared to the prior year. We view the shift to a higher gross margin rate as a structural change to our business model.
The company maintained its belief that its higher-value “strategic shift” in inventory will pay off. This runs the gamut of changes, from a 2022 policy update to consignor commission rates, to the recent trial of on-site advertising, as a way to convert billions of website impressions. Analyst are watching how the company takes to the changes.
With a focus on high-margin consignment pieces, The RealReal’s gross merchandise volume decreased 7 percent to $423 million . That being said, active buyers increased 11 percent to 985,000Shares of The RealReal closed at $2.17 per share per data from Yahoo Finance.