The RealReal to reduce workforce by 7%, shutter stores
The RealReal, Inc. announced on Thursday a cost reduction plan that will terminate approximately 230 employees, representing approximately 7% of its workforce, as it aims to cut costs amid growing pressure to achieve profitability.
As part of the plan, intended to reduce operating expenses, the luxury reseller will also cut some of its real estate presence.
In particular, it plans to close two flagship stores in San Francisco, California and Chicago, Illinois, two neighborhood stores in Atlanta, Georgia and Austin, Texas, and two luxury consignment offices in Miami, Florida and Washington, D.C. Likewise, the company will reduce its office spaces in San Francisco, California and New York, New York.
The company estimates that it will incur non-recurring charges of approximately $1.7 to 2.2 million in connection with the plan, primarily consisting of severance payments, employee benefits contributions and related costs.
The company expects that the majority of these charges will be incurred in the first quarter of fiscal 2023. The implementation of the headcount reductions, including cash payments, is expected to be complete by the end of the first quarter of fiscal 2023.
Earlier this year, The RealReal announced plans to double-down on its efforts to enhance the luxury consignment experience it offers to its millions of members. The New York-based company said it is focusing on a new consignor concierge service, an enhanced loyalty program, as well as an improved data insights center offering.
In January, it also named John E. Koryl as its chief executive officer. He replaces founder Julie Wainwright who exited the company, back in June 2022.
Copyright © 2023 FashionNetwork.com All rights reserved.