The RealReal reports widening losses as Covid-19 disrupts warehouse operations
San Francisco-based fashion consignment marketplace The RealReal announced a net loss of $38.3 million for the first quarter ended March 31, 2020, on Wednesday, as restrictions implemented to slow the spread of the coronavirus pandemic disrupted operations in the company’s warehouses.
The figure represented a significantly wider loss compared to that of $23.2 million posted by the company in the prior-year period. Diluted loss per share was $0.44, compared to $3.05 in Q1 2019.
Despite the ongoing health crisis, the company’s total quarterly revenue came to $78.2 million, increasing 11% from $70.6 million in the same period in the previous year.
This rise reflected a 17% increase in consignment and service revenue, which totaled $65.3 million, up from $55.6 million, and a 14% decrease in direct revenue, which totaled $12.9 million, down from $15.0 million.
Gross merchandise volume (GMV) rose 15% year over year to $257.6 million, with GMV from repeat buyers representing 84.4% of this total, up from 82.4% in the first quarter of 2019.
“Since we announced preliminary first quarter results on April 14, our operations continued to be constrained by shelter-in-place directives, resulting in a significant GMV headwind,” said The RealReal CEO Julie Wainwright in a release. “Given the strength of our balance sheet, customer satisfaction, high buyer and consignor repeat rates, and technology innovations driving efficiency, I’m confident we’re well positioned to bounce back quickly once the economy stabilizes and capitalize on the significant opportunity in front of us.”
Wainwright also highlighted a number of initiatives being implemented by the company in order to reduce operating expenses and preserve liquidity in the face of the challenges posed by the coronavirus crisis.
In light of the lack of visibility related to the Covid-19 pandemic, The RealReal withdrew its financial guidance on March 17 and has not provided a revised outlook since.
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