The RealReal is the latest fashion company to cut jobs as more businesses work through economic headwinds.
According to a filing with the Securities and Exchange Commission (SEC), the luxury consignment and resale retailer is terminating approximately 230 employees, representing approximately 7% of its workforce, as part of a new cost savings plan intended to reduce operating expenses.
On top of these job cuts, The RealReal also announced that it will reduce its retail footprint by closing two flagship stores (San Francisco, Calif. and Chicago, Ill.), two neighborhood stores (Atlanta, Ga. and Austin, Texas), and two luxury consignment offices (Miami, Fla. and Washington, D.C.), including any co-located logistics hubs.
Additionally, the company also plans to reduce its office spaces in San Francisco and New York, the filing said.
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“The company will continue to evaluate its real estate presence as it deems appropriate to create efficiencies and to address trends in the marketplace and macroeconomic factors,” the company wrote in the filing.
The RealReal said in the SEC filing that it estimates it will incur non-recurring charges of approximately $1.7 million to $2.2 million in connection with the layoffs, primarily consisting of severance payments, employee benefits contributions and related costs.
The company added that it expects that the majority of these charges will be incurred in the first quarter of fiscal 2023 and that the implementation of the headcount reductions, including cash payments, will be substantially complete by the end of the first quarter of fiscal 2023.
With the news, The RealReal becomes the latest firm to announce job cuts this year, along with Amazon, Everlane, Foot Locker, Kohl’s, Neiman Marcus and more retail companies.
Just last month, The RealReal, Inc. named John Koryl as CEO and board member, effective Feb. 6. He succeeded the company’s founder Julie Wainwright, who stepped down from her role as CEO, chairperson, and member of the board after 11 years in June.
