The RealReal, Target Show Struggles in Retailing

It’s no fun being a shopkeeper nowadays. Today, a few days after Amazon’s consumer chief Dave Clark left the building, The RealReal said its CEO and founder, Julie Wainwright, was walking away from the retailer of used luxury goods. Wainwright, who launched the company 11 years ago after stints running several other companies including dot-com–era disaster Pets.com, is even giving up her board seat. 

The RealReal gave no clue as to the reason for Wainwright’s departure. Let’s face it, though: The business has been a stinker for years. Its losses have mounted as its revenue has grown—we think red ink is supposed to dry up as revenue expands—while the stock price has lately hovered around $3. Last year, it was as high as $28 (which is nothing to celebrate, given that the firm went public in 2019 at $20 a share). Then again, the current economic environment is tough on every retailer. Things are so volatile that Target today revealed it now expects its second-quarter operating profit margin to be around 2%—just three weeks ago it had projected around 5.3%. (For all of 2021, Target’s operating profit margin was 8.4%.) Stuck with too much inventory—thanks to rapid changes in what people are buying—Target is planning some clearance sales. That’s good news for consumers, bad news for Target investors.