The RealReal Posts a Record Quarter as Luxury Shoppers Turn to Resale

The RealReal has posted the strongest quarter in its history while fashion sales at the largest houses are falling. The American platform, which sells consigned designer clothing, handbags, watches and jewellery, reported on 29 October that its gross merchandise value, the total value of the goods it sold, rose 23 per cent to $642 million in the third quarter. Revenue climbed 19 per cent to $206.1 million, and the company raised its forecast for 2026 to between $2.585 billion and $2.6 billion in merchandise value.

Orders rose 15 per cent to just over a million, the strongest growth in orders since 2022 according to the company, and the average order was up 8 per cent at $629. “Q3 was another record quarter for The RealReal, with quarterly all-time highs in GMV, revenue and orders,” said Rati Levesque, its chief executive.

●In brief

The business. Consignment, in which The RealReal sells goods on behalf of their owners and keeps a share of the price, brought in $159.1 million, up 18 per cent. The gross margin reached 74.9 per cent, and the company made an operating profit of $1.5 million, against a loss of $7.6 million a year earlier. Its net profit of $16 million includes a non-cash gain of $21.2 million on warrants, and the balance sheet still shows a stockholders’ deficit of $354 million after a refinancing in October.

The buyers. The number of active buyers over the past twelve months increased by 13 per cent to 1.15 million. The company keeps an average of 36.8 per cent of each sale.

The outlook. For the fourth quarter, The RealReal expects merchandise value of $720 million to $735 million. For 2026 as a whole it now forecasts revenue of $806 million to $810 million and adjusted EBITDA of $71.1 million to $72.6 million.

●Why it matters

Resale is growing while new luxury contracts. In the same quarter, fashion and leather goods at LVMH fell 5 per cent on an organic basis, and Gucci’s sales fell 6 per cent. The RealReal increased the value of the goods it sold by almost a quarter. Levesque described the result as the sign of “a fundamental change in how people shop for luxury fashion”. Resale is also changing how value is set: the second purchase increasingly decides what an object is worth.

The timing matters in Europe as well. The European Commission’s consultation on a lower VAT rate for second-hand goods and repairs closes on 4 November, and the push is led by fast-fashion groups such as H&M and Inditex, which want Brussels to cut VAT on second-hand clothes. The business statement behind it, coordinated by the Ellen MacArthur Foundation, also asks for sales tax on resale to be removed in the United States, the market in which The RealReal operates. A lower tax would favour resale businesses on both sides of the Atlantic, the platforms run by the large fashion groups among them.

The growth has yet to turn into a solid profit. The operating profit of $1.5 million follows a loss of $7.6 million a year earlier, the net result depends on an accounting gain, and the company still owes more in convertible and other notes than it holds in cash. Whether the demand for luxury goods with a previous owner produces a durable profit depends on the coming quarters.

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