Authentication Troubles May Be the Real Opportunity for The RealReal to Show Its Style
Online luxury consignment shop The RealReal (NASDAQ: REAL) promises that every Chanel handbag and Hermes scarf it sells is indeed the real deal. When a CNBC report earlier this month showed evidence pointing to the contrary, the stock fell, and it's since down more than 20%.
While the news obviously spurred some consumer-goods investors to run, analysts haven't been as quick to react. Data compiled by Yahoo Finance shows that Wall Street in general continues to view The RealReal as a buy. Although the authenticity questions didn't make for fabulous news, they're not an automatic reason to hit the panic button, either.
The RealReal is facing the same challenge as every luxury reseller: the counterfeit threat. Global trade in fake goods totals almost half a trillion dollars a year, according to the multinational Organization for Economic Cooperation and Development (OECD), and an article in the Harvard Business Review suggests that 40% of fake luxury goods sales happen online. The problem resulted in $30.3 billion in losses for luxury brands in 2018, according to a 2018 report on global brand counterfeiting.
Source Fool.com
