Online start-up The RealReal launched in 2011 but is just now starting to grow its physical presence, right as a new wave of e-commerce brands looks to take over spaces previously occupied by Toys R Us, RadioShack, Rue21 and other bankrupt brands.
The luxury consignment shop currently has one permanent store in New York's SoHo neighborhood but later this week will open its second permanent location in Los Angeles. It's been testing pop-up shops across the U.S., while a recent Series G round of financing that raked in $115 million will allow the company to open more stores, founder and CEO Julie Wainwright told CNBC.
The expansion for The RealReal comes as both luxury and discount retailers, like Gucci and T.J. Maxx, are viewed as being the top performers and most sought-after businesses in the industry. Other types of retailers such as department stores are struggling to offer shoppers something unique. The RealReal offers the high-end brands desired by luxury shoppers and the treasure hunt experience enjoyed by discount shoppers.
"We wanted to change people's perception of what a consignment business looks like," Wainwright said. "I would say some of the smartest people I know have been buying consignment forever but never talked about it — even some of the richest people I know, because they like good value."
The RealReal's new store in Los Angeles is on Melrose Avenue, settled close to Nordstrom Local, Glossier, Away and a slew of other e-tailers, is a whopping 12,000 square feet. Unlike the company's existing and smaller space in SoHo, this location will feature a 5,500-square-foot portion dedicated to men. It will use about 1,500 square feet to display handbags. There's also a cafe serving coffee, pressed juice, salads and pastries.