The RealReal CEO Rati Levesque Talks Luxury Resale Boom

**SPEAKER_1** (0:02)
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**Dani Burger** (0:12)
The resale market is expected to hit $289 billion this year, more than double its size five years ago.
The RealReal, riding that growth, raising its foyer outlook after a strong second quarter. Joining us now is the company CEO, Rati Levesque. Rati, great to see you. And two pieces of data that caught my eye. One, that European luxury houses have raised their prices by over 50 percent since 2019 The other piece of data being that sales of items priced over $1,000 on your platform have jumped 36 percent.
Rati, are those two things related? Are people getting priced out of some of the luxury firsthand market and turning to the RealReal instead?

**Rati Levesque** (0:53)
So, what we're seeing is our consumers just being quite resilient at the end of the day.
We're seeing a lot of confidence in what they're spending. More fine jewelry, more watches, handbags. Like you said, more items over $1,000 in the first half of the year. But also wanting to monetize their closet. We're seeing more people want to check their closets, what are the items worth, and call our luxury or sales team to book an appointment to see how much is in their closet at the end of the day.

**Dani Burger** (1:25)
Louis Vuitton, though, for example, was one of your most rich brands.
And again, it's one of the ones that I mentioned, that have risen prices and seen their own sales stagnate. Does the data suggest at all that the growth of your consumers are coming from anyone who's been priced out of the boutiques?

**Rati Levesque** (1:42)
So I don't know if that's true or not, but what we are seeing is the circular economy. So we're seeing our customers shop in the primary market with more confidence. And what they are doing, especially our fastest growing segment, Gen Z, Millennials, what they are doing, over 80 percent are now checking the prices in the secondary market before they're purchasing in the primary market. So giving them more confidence to look at what is that item going to resale for, and if they should go ahead and make that purchase or not.

**Dani Burger** (2:11)
Interesting. Well, in the primary market, we have seen this shift where at least temporarily, we've seen some of the American houses, be it Ralph Lauren or Coach, are outperforming some of the European luxury. Is the same happening on your platform too?

**Rati Levesque** (2:26)
We're seeing a few different things. We're seeing great brands that are more emerging, having a moment too. What we're seeing is again, that Gen Z millennial demographic. They're looking for items that make them feel unique, authentic. They say when they shop the RealReal, they feel like themselves. They love testing some of the trends. It gives them the confidence to test some of the trends that they're seeing. We sit at that intersection between value and luxury.
And that's what people are really engaging with.

**Dani Burger** (2:56)
There's also this idea, and I mean, we've discussed it on the show. We have one hedge fund manager who joins us sometimes that has a hedge fund that specifically buys and sells Birkin and Kelly bags. This idea that some of these pieces, our investments has really taken off. Rati, on your platform, which types of clothing items, leather goods are actually investments and see their prices and I appreciate it. Is it just, Hermes, the really high-end type luxury or is it popping up elsewhere?

**Rati Levesque** (3:24)
No, it doesn't. It's not just the marquee brands. It's not just those actually, like I said, they're emerging brands. They could be contemporary brands. It's items that are really iconic to maybe that season, that generation. So even things like mid-tier prices and clothing items that just had a moment. And I think the thing that is surprising to people is that all of these items are unique, one-of-a-kind, limited edition. So a lot of the items and the value does go up in the secondary market because you can't find them anywhere else.

**Dani Burger** (4:00)
Have there been any items that you've been surprised at how much prices have risen?

**Rati Levesque** (4:06)
I think that it's the items that, again, are just more contemporary clothing items. I think people expect jewelry, watches, vintage, and the big 90s resurgence that we're seeing, we're seeing the value of those really go up. And the Gen Z demographic is discovering them for the first time, where I grew up with those items. That always surprises me.

**Dani Burger** (4:30)
I was going to say, Rati, it's a really good way that makes me feel incredibly old when the 90s is vintage and in now.