(Reuters) - Shares of U.S. online luxury reseller The RealReal Inc (REAL.O) jumped 40% in their debut on Friday, giving it a market capitalization of $2.32 billion and signaling increased investor appetite for listings of consumer companies.
The shares opened at $28, above their initial public offering price of $20.
The offering of 15 million shares was priced at $20, above the expected range of $17 and $19 per share, helping the company raise $300 million in net proceeds.
The RealReal, which specializes in selling and buying second-hand luxury items including clothing and accessories, was founded by Chief Executive Officer Julie Wainwright in 2011.
People can list their unwanted luxury goods, some that are either used or still have tags on them, and the company then takes a cut when a sale is made.
The RealReal, which started out as a business run from Wainwright’s kitchen table, now processes nearly 2 million orders. It has expanded its physical presence by opening two brick-and-mortar stores in Manhattan and one in Los Angeles that collect as well as sell goods.
The company has been thriving on the rising sales of second-hand, or vintage, luxury goods - from Chanel handbags and Gucci dresses to Rolex watches - banking on growing millennial interest in the price and environmental benefits of recycled clothing.
The personal luxury goods market is expected to grow to between $364 and $415 billion in 2025, with millennials expected to represent 40% of the market, according to research firm Bain & Co.
