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The board has appointed Rati Sahi Levesque, The RealReal’s president and chief operating officer, as well as Robert Julian, the retailer’s chief financial officer, as co-interim CEOs, effective Tuesday.
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“On behalf of the entire board, I want to thank Julie for her leadership and commitment to The RealReal,” Rob Krolik, lead independent director, said in a statement. “Julie is a true visionary and pioneer whose passion for sustainable retail and deep e-commerce expertise helped transform the luxury resale market and create the broader circular economy for the benefit of consumers across the country.
“Rati and Robert bring complementary skill sets that together create a powerful combination of operational, financial and industry expertise,” Krolik continued. “Rati has been with the company since its founding and has worked side-by-side with Julie to grow the business from the ground up, creating our merchandising strategy, encouraging our sustainability efforts and managing our operations. A valuable member of senior management since he joined The RealReal, Robert’s perspective and leadership have been instrumental in navigating challenges during the last year. They are exceptionally well suited to serve as co-interim CEOs while the search for a permanent CEO replacement is underway.”
The news comes as the luxury reseller continues to struggle with widening quarterly losses, even as top-line sales grow. In May, the retailer revealed losses of $57.4 million, despite revenues rising 48.5 percent.
“While some are sad to see Ms. Wainwright leave, a fresh set of eyes on the business could be beneficial given the market volatility,” Ashley Helgans, equity analyst at Jefferies, wrote in a note. “In recent months, investors’ priorities have changed to favor profitability over growth. An outside CEO with experience operating a profitable public company may give investors more confidence in [the] path to profitability and 2025 vision.”
Wainwright has led the resale retail company for 11 years. As of May 20, she owned approximately 2.6 million shares of the company, or about 2.8 percent. Wainwright has agreed to stay in an advisory role as the founder until the end of 2022 as The RealReal board searches for a new permanent CEO.
“I am deeply proud of the company we have built and am honored to have worked with a team that champions our founding vision of creating a more sustainable future for fashion,” Wainwright said. “The RealReal continues to make progress on its path to profitability and I feel now is the right time for the next generation of leadership to guide the company through its next chapter. I am incredibly thankful for everyone who has worked tirelessly to support our journey and I have deep trust in Rati, Robert and the rest of our management team to execute on Vision 2025.”
Levesque has been with the company since 2012, working her way up from chief merchant to COO, before being named the company’s president last year.
“I am honored to be appointed co-interim CEO and look forward to working closely with Robert, the management team and the board as we focus on continuing to grow The RealReal, extend its industry leadership and execute on Vision 2025,” she said. “I have been fortunate to work with Julie since our company’s founding 11 years ago. I am grateful for her leadership, vision and years of mentorship and friendship as we built The RealReal to transform the luxury resale market.”
Along with Levesque, Julian will bring more than 30 years of financial management experience to his new seat in the C-suite. He became CFO of The RealReal in 2021. Prior to joining the company, he served in various leadership positions at Sportsman’s Warehouse, Deluxe Entertainment Services and Callaway Golf and Lydall, among others.
“It is a privilege to serve as The RealReal’s co-interim CEO alongside Rati and I am thrilled to build upon Julie’s legacy at this extraordinary company,” he said. “I look forward to continuing to work with The RealReal’s world-class team and positioning our unrivaled offerings and innovative platform to capitalize on our bright future ahead.”
Investors seemed pleased with the news. Shares of The RealReal closed up 5.52 percent Tuesday to $3.06 apiece.
“We continue to believe that the [company] is well positioned to weather the volatile macro backdrop as [The RealReal] is a value option, offering unique and coveted items in the luxury goods space,” Helgans of Jefferies wrote. “In our view, inflation could result in a sustained tailwind to RealReal’s business, as it will likely drive more customers to purchase luxury secondhand, versus the primary market. We also suspect the volatile macro backdrop may provoke more consignment from consumers looking to monetize their closets.”
Helgans’ comments reiterate what Wainwright told analysts during last month’s conference call. The founder pointed out that while The RealReal’s popularity is growing, many consumers still don’t even know about the platform.
“We have less than 2 percent of potential consignors in the U.S. and over 40 percent of our consignors that consign with us are first-time consignors,” Wainwright said at the time. “That’s been almost since the beginning of time. We’re still introducing the market, introducing people to the whole value of consigning and that they have trapped value in their house. Once they start consigning with us, they tend to continue.”
Jefferies rated The RealReal stock a “buy” and set a price target of $13 a share, despite year-over-year declines in the stock’s value. In the last year, shares of The RealReal have fallen roughly 83.4 percent.