1 00:00:02,520 --> 00:00:07,880 Speaker 1: Bloomberg Audio Studios, podcasts, radio News for more. 2 00:00:07,880 --> 00:00:10,600 Speaker 2: Now on the second hand luxury market, we're joined by 3 00:00:10,680 --> 00:00:14,440 Speaker 2: Ratti Levet, the Real Real President and CEO The Real Real, 4 00:00:14,440 --> 00:00:17,919 Speaker 2: of course, the world's largest online marketplace, were authenticated resale 5 00:00:18,000 --> 00:00:21,680 Speaker 2: luxury goods. Well, Ratty, you've been doing extraordinarily well at 6 00:00:21,680 --> 00:00:25,880 Speaker 2: the Real Real, you know, increasing margins, increasing, you know, 7 00:00:26,640 --> 00:00:28,639 Speaker 2: just the amounts that you sell. How much have you 8 00:00:28,720 --> 00:00:31,920 Speaker 2: been benefiting from things that are maybe a detriment to 9 00:00:31,960 --> 00:00:33,200 Speaker 2: the economy like tariffs? 10 00:00:34,440 --> 00:00:35,760 Speaker 3: Yeah, you know, it's interesting. 11 00:00:35,840 --> 00:00:37,840 Speaker 1: So what we're seeing, we're seeing the buyer be quite 12 00:00:37,880 --> 00:00:41,880 Speaker 1: resilient at the Real Reel. We're seeing consumer trends being 13 00:00:41,920 --> 00:00:46,800 Speaker 1: quite strong around findelty, watches, handbags. We're definitely probably a 14 00:00:46,840 --> 00:00:50,680 Speaker 1: tariff beneficiary, but at the same time, there's other things 15 00:00:50,760 --> 00:00:55,640 Speaker 1: kind of impacting our business. Resales becoming more mainstream, that's 16 00:00:55,840 --> 00:00:59,120 Speaker 1: number one, and definitely seeing that led by the gen 17 00:00:59,280 --> 00:01:00,880 Speaker 1: Z and malen Old consumer. 18 00:01:01,720 --> 00:01:04,440 Speaker 3: We're seeing fine jewelry and watches be very popular. 19 00:01:04,480 --> 00:01:08,200 Speaker 1: Like I mentioned, gold pricing, silver pricing going up, and 20 00:01:08,200 --> 00:01:11,480 Speaker 1: then we're also seeing gifting becoming less of a stigma 21 00:01:11,480 --> 00:01:14,480 Speaker 1: on resale. So almost sixty percent of consumers now say 22 00:01:14,480 --> 00:01:18,759 Speaker 1: they prefer the secondary market out right. So seeing luxury 23 00:01:18,959 --> 00:01:23,120 Speaker 1: and seeing resale specifically becoming much more mainstream right now. 24 00:01:23,440 --> 00:01:26,960 Speaker 2: Now you've been aggressively cost cutting, restructuring your commission model 25 00:01:26,959 --> 00:01:30,080 Speaker 2: and so on, is there any danger that you will 26 00:01:30,319 --> 00:01:32,560 Speaker 2: maybe not get in the supply that you need in 27 00:01:32,680 --> 00:01:34,399 Speaker 2: order to keep supplying this market. 28 00:01:35,600 --> 00:01:37,080 Speaker 3: Yeah, So, you know, it's interesting. 29 00:01:37,120 --> 00:01:39,080 Speaker 1: I think that one of the things is that there's 30 00:01:39,120 --> 00:01:42,480 Speaker 1: two hundred billion dollars trapped in people's closets. That's just 31 00:01:42,520 --> 00:01:45,600 Speaker 1: in the US alone, and so we're it's such an 32 00:01:45,720 --> 00:01:49,240 Speaker 1: untapped industry. At the end of the day, eighty billion 33 00:01:49,280 --> 00:01:53,600 Speaker 1: dollars gets added to that every year, so so much good, 34 00:01:53,680 --> 00:01:57,680 Speaker 1: so much luxury goods, just in the US alone, And 35 00:01:57,760 --> 00:02:00,680 Speaker 1: so many of these people have never consigned any before. 36 00:02:00,880 --> 00:02:04,960 Speaker 1: So we're seeing people become kind of introduced to luxury 37 00:02:05,000 --> 00:02:09,080 Speaker 1: for the first time. So double digit new sellar growth 38 00:02:09,080 --> 00:02:11,640 Speaker 1: for example, So people are really starting to change the 39 00:02:11,680 --> 00:02:14,840 Speaker 1: way they shop, and they're checking the prices in the 40 00:02:14,880 --> 00:02:18,400 Speaker 1: secondary market before they're even purchasing in the primary market. 41 00:02:19,120 --> 00:02:21,680 Speaker 4: I wanted to talk about prices Rotti because our very 42 00:02:21,680 --> 00:02:25,960 Speaker 4: own Amandamal Bloomberg wrote just a few days ago twenty nineteen, 43 00:02:26,080 --> 00:02:30,000 Speaker 4: the price of a Chanelle flat bag five eight hundred dollars. 44 00:02:30,320 --> 00:02:33,720 Speaker 4: Fast forward to right now, it's over eleven thousand dollars. 45 00:02:34,160 --> 00:02:36,959 Speaker 4: I'm wondering just how much the growth of the real 46 00:02:37,000 --> 00:02:38,919 Speaker 4: real is coming out of the fact that people feel 47 00:02:38,919 --> 00:02:42,760 Speaker 4: like they just can't they can't stomach the prices in 48 00:02:42,800 --> 00:02:44,080 Speaker 4: the luxury market. 49 00:02:44,720 --> 00:02:46,280 Speaker 3: Yeah, so there's a couple of things happening. 50 00:02:46,320 --> 00:02:50,799 Speaker 1: Anytime the price increases in the primary market, our pricing 51 00:02:50,840 --> 00:02:54,200 Speaker 1: goes up to So for whatever reasons, whether it's tariffs, 52 00:02:54,480 --> 00:02:58,080 Speaker 1: whether the pricing of a Chanel bag goes up for 53 00:02:58,120 --> 00:03:00,320 Speaker 1: whatever reason, our prices go up as well. 54 00:03:00,560 --> 00:03:01,440 Speaker 3: But like I said, what. 55 00:03:01,440 --> 00:03:04,840 Speaker 1: We're also seeing is more volume coming through, so more 56 00:03:05,240 --> 00:03:08,960 Speaker 1: people being introduced to luxury and testing it out, and 57 00:03:08,960 --> 00:03:11,600 Speaker 1: then they get that first paycheck, right, they get that 58 00:03:11,639 --> 00:03:14,520 Speaker 1: first paycheck for the bag, and then they go back 59 00:03:14,560 --> 00:03:17,440 Speaker 1: into the primary market. What we're actually seeing is that 60 00:03:17,560 --> 00:03:20,760 Speaker 1: circular economy. And so they'll go back into the primary 61 00:03:20,800 --> 00:03:24,440 Speaker 1: market with their check and buy the newest trend or 62 00:03:24,480 --> 00:03:27,240 Speaker 1: buy something that they've been eyeing, and then they'll consign 63 00:03:27,280 --> 00:03:29,440 Speaker 1: two or three things instead. 64 00:03:29,480 --> 00:03:32,040 Speaker 3: So we'll see that kind of trade up happening as well. 65 00:03:32,360 --> 00:03:36,360 Speaker 4: And what are the consumers typically gravitating for on the 66 00:03:36,400 --> 00:03:39,320 Speaker 4: real real Are they looking for a bargain on a 67 00:03:39,400 --> 00:03:43,120 Speaker 4: classic luxury item or are they turning to secondhand markets 68 00:03:43,120 --> 00:03:45,559 Speaker 4: when they want to buy something trendier. 69 00:03:46,280 --> 00:03:50,720 Speaker 1: Yeah, so we're seeing that intersection between value and luxury. 70 00:03:50,760 --> 00:03:52,840 Speaker 1: That's what we offer right at the end of the day. 71 00:03:52,840 --> 00:03:55,200 Speaker 1: And then you've got very unique items. 72 00:03:55,200 --> 00:03:56,200 Speaker 3: So most of our items you. 73 00:03:56,160 --> 00:03:59,280 Speaker 1: Can't buy anywhere else, So they're looking for those one 74 00:03:59,280 --> 00:04:01,880 Speaker 1: of a kind pieces. You know, they're kind of maybe 75 00:04:02,040 --> 00:04:04,440 Speaker 1: done with the trends or everything's starting to look the same. 76 00:04:04,560 --> 00:04:05,400 Speaker 3: It's the badge of. 77 00:04:05,320 --> 00:04:08,360 Speaker 1: Honor to where something very unique from the real reel. 78 00:04:08,400 --> 00:04:10,800 Speaker 1: So think of them like drops. Thousands of items get 79 00:04:10,920 --> 00:04:14,440 Speaker 1: dropped every day that are very unique to the consumer consumer. 80 00:04:14,520 --> 00:04:15,640 Speaker 3: So that's number one. 81 00:04:15,920 --> 00:04:20,279 Speaker 1: Find jewelry, like I mentioned, watches, handbags, Vintage is a 82 00:04:20,279 --> 00:04:23,840 Speaker 1: big one, as is condition. Again, seeing more of that 83 00:04:23,960 --> 00:04:26,960 Speaker 1: value play come through. People are looking for that value. 84 00:04:27,040 --> 00:04:30,080 Speaker 1: They'll take something that maybe is in fair condition instead 85 00:04:30,080 --> 00:04:33,919 Speaker 1: of pristine condition, just so that it costs a little less. 86 00:04:33,760 --> 00:04:34,599 Speaker 3: At the end of the day. 87 00:04:34,760 --> 00:04:37,240 Speaker 2: You know, there are competitors out there now, fashion file, 88 00:04:37,360 --> 00:04:39,839 Speaker 2: rebag and so on. How do you compete with them roalthy? 89 00:04:40,880 --> 00:04:43,240 Speaker 1: Yeah, So you know, when I think about the real reel, 90 00:04:43,320 --> 00:04:47,960 Speaker 1: it's really around. We offer for very depth in products, 91 00:04:47,960 --> 00:04:51,520 Speaker 1: So we don't offer just one category, right, it's handbags, 92 00:04:51,800 --> 00:04:53,440 Speaker 1: it's jewelry. 93 00:04:52,839 --> 00:04:57,640 Speaker 3: Watches, fashion, textiles, sover where. All of that we're offering 94 00:04:58,000 --> 00:04:58,880 Speaker 3: at the real reel. 95 00:04:59,200 --> 00:05:02,159 Speaker 1: So there's a lot and then we give you cash 96 00:05:02,279 --> 00:05:06,160 Speaker 1: upfront and that's really important, right, versus trade up or trading. 97 00:05:06,400 --> 00:05:08,480 Speaker 1: And then you earn the most with us, And that's 98 00:05:08,520 --> 00:05:09,760 Speaker 1: really important to say. 99 00:05:10,000 --> 00:05:11,080 Speaker 3: And the reason why is. 100 00:05:11,040 --> 00:05:13,360 Speaker 1: Because of the trust that we built with the consumer, 101 00:05:14,160 --> 00:05:16,960 Speaker 1: because we know, because you can sign with us because 102 00:05:16,960 --> 00:05:19,840 Speaker 1: we've got almost fifty million members now that we've built 103 00:05:19,880 --> 00:05:23,719 Speaker 1: trust with because of our pricing algorithms, you can earn 104 00:05:24,120 --> 00:05:25,680 Speaker 1: the most with us at the end of the day. 105 00:05:25,839 --> 00:05:28,640 Speaker 2: I'm curious as well, how much are your physical stores contributing. 106 00:05:28,680 --> 00:05:31,560 Speaker 2: Are they contributing to the bottom line? And you know, 107 00:05:31,920 --> 00:05:34,159 Speaker 2: is it just a marketing play at the end of 108 00:05:34,160 --> 00:05:35,880 Speaker 2: the day, And when does that bottom line, by the way, 109 00:05:35,960 --> 00:05:36,640 Speaker 2: turn positive? 110 00:05:37,800 --> 00:05:38,680 Speaker 3: Yeah, so the. 111 00:05:38,760 --> 00:05:41,680 Speaker 1: Stores pay back very quickly actually, and what we see 112 00:05:42,200 --> 00:05:45,760 Speaker 1: is a halo impact. So it's meeting the consigner where 113 00:05:45,760 --> 00:05:47,839 Speaker 1: they are, whether they want to drop off in a 114 00:05:47,880 --> 00:05:49,800 Speaker 1: store on their way to work, whether they want a 115 00:05:49,880 --> 00:05:53,720 Speaker 1: van pickup at three pm this afternoon on demand. They 116 00:05:53,760 --> 00:05:56,720 Speaker 1: can book that from their app, and we're seeing the consigner. 117 00:05:56,800 --> 00:05:59,080 Speaker 3: The seller can sign more. 118 00:05:59,000 --> 00:06:01,440 Speaker 1: Items when they inner act with the store, and more 119 00:06:01,520 --> 00:06:04,880 Speaker 1: high value items because they're meeting with a gymologist and watchmaker. 120 00:06:05,240 --> 00:06:08,080 Speaker 1: So yes, it's a place that people get introduced to 121 00:06:08,120 --> 00:06:13,120 Speaker 1: our brand. A quarter of our new consigners come from 122 00:06:13,200 --> 00:06:16,160 Speaker 1: the stores, from our retail locations, but we more see 123 00:06:16,160 --> 00:06:20,000 Speaker 1: a halo impact, so from the consigner consigning more for 124 00:06:20,120 --> 00:06:22,880 Speaker 1: us with us and then spending more. 125 00:06:22,720 --> 00:06:23,760 Speaker 3: At the end of the day too. 126 00:06:24,360 --> 00:06:27,560 Speaker 4: Brantie levec CEO of The Real Real, thank you for 127 00:06:27,640 --> 00:06:28,160 Speaker 4: joining us.