May 8, 2014, 3:35 PM

Luxury consignment e-retailer Real Real raises $20 million

Real Real, the second fastest-growing merchant in the new Top 500 Guide, says the funds will go toward building out its infrastructure, including a newly leased warehouse in New Jersey.

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Online apparel and accessories retailer Real Real Inc. has raised $20 million in new funding, bringing the total amount it has raised to $43 million since its founding three years ago.

The funds will go toward building out its infrastructure, CEO Julie Wainright says, including a newly leased 125,000-square-foot fulfillment center in Secaucus, NJ.

The company, based in San Francisco, boosted its online sales 296.8% last year to an estimated $60 million. Real Real is the second fastest-growing retailer in the newly released Internet Retailer 2014 Top 500 Guide. Last year, the e-retailer was the No. 1 fastest-growing merchant in the Second 500 Guide, which ranks e-retailers Nos. 501-1,000. The 2014 edition of the Second 500 Guide will be released in late June. The company, No. 295 in the 2014 Top 500, was ranked No. 554 in the 2013 Second 500.

Real Real sells high-end luxury apparel and accessories on a consignment basis. Consumers send in used items like Gucci bags or Armani suits, and items are resold on RealReal.com. Sellers get a 60%-70% cut of each sale.

The nature of Real Real’s business makes for a complicated order flow, as the merchant has to track and verify the authenticity of each item that comes in, while also taking and fulfilling outgoing orders to shoppers on RealReal.com.

In December, Real Real hired Ann Paolini, a 25-year veteran of The Neiman Marcus Group, as executive vice president of sales. In August 2013, Real Real launched a localized version of its site in Japan. The online retailer operates a distribution center near Tokyo. The merchant currently fulfills orders, except for those from Japanese consumers, out of its headquarters and warehouse facility in San Francisco.

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