Even when second-hand luxury items might be the best option for luxury customers during a global lockdown, the companies in this segment are facing major financial problems in continuing their operations.
TheRealReal reported that almost 10 per cent of the staff has been laid off which includes a majority of in-store workers. Additionally, 15 per cent of the staff has been furloughed to cut costs and make up for the lost sales.
While the company is facing losses, the company representatives have claimed that the lay-offs and furloughs are a part of a temporary restructuring and the company aims to come back stronger by supporting its employees.
TheRealReal has also imposed salary cuts on the executive level and has temporarily paused hiring.
“…we’ve focused on reducing operating expenses and preserving liquidity to weather the near-term challenges and ensure we are well positioned to capitalise on the significant opportunity in front of us,” said Julie Wainwright, The RealReal CEO.
TheRealReal has been continuously bombarded by various controversies including the questions on its authentication process and customers claiming to have received fake luxury items.
