The RealReal, an online platform that resells authenticated branded luxury clothing, is aiming to become the first billion dollar circular economy company.
The company, which is certified by the Ellen MacArthur Foundation, operates on the premise that it purchases used luxury goods that it verifies, before re-selling them. By doing so it keeps goods in circulation that could otherwise be sent to landfill. Since its founding in 2011, the company has enjoyed considerable success so that it is now has over 600 employees and sales exceeding $400 million. CEO Julie Wainwright believes the company will soon become a billion dollar business.
The way luxury brands deal with excess stock to protect brand image has come under scrutiny recently, with Burberry being criticised for opting to incinerate £28 million worth of clothes rather than risk them falling into the wrong hands. According to Wainwright the RealReal is pushing for a wider systemic shift by changing consumer habits. By providing an accessible marketplace for second-hand luxury items it hopes to create a long-term shift so that first-time buyers purchase products with a high re-sell potential whereas second time buyers opt to buy affordable quality second-hand clothes over fast fashion.
By keeping goods in circulation the company has a legitimate claim to be extending the lifecycle of goods, a key tenant of the circular economy. However, given the company does not find value from goods at the end of their life, does it really represent the circular economy in action or is it just keeping used-goods in circulation? As such, how does it differ from conventional high-street charity shops? Does The RealReal’s greatest impact for sustainability lie in its attempt to change consumer habits in the luxury clothing sector?