RealReal to terminate 7% of workforce as part of savings plan

In a regulatory filing earlier, The RealReal disclosed that on February 15, the company announced a savings plan intended to reduce operating expenses. The company is reducing its headcount and rationalizing its real estate footprint. Under this plan, the company will terminate approximately 230 employees, representing approximately 7% of its workforce, and reduce its real estate presence, the filing stated. "At this time, the company intends to (i) close two flagship stores (San Francisco, California and Chicago, Illinois), two neighborhood stores (Atlanta, Georgia and Austin, Texas), and two luxury consignment offices (Miami, Florida and Washington, D.C.), including any co-located logistics hubs, and (ii) reduce its office spaces in San Francisco, California and New York, New York. 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 estimates that it will incur non-recurring charges of approximately $1.7 to 2.2 million in connection with the RIF, primarily consisting of severance payments, employee benefits contributions and related costs. The company 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. Potential position eliminations are subject to legal requirements that vary by jurisdiction, which may extend this process beyond the first quarter of fiscal 2023 in certain cases. The charges that the Company expects to incur are subject to a number of assumptions, including legal requirements in various jurisdictions, and actual expenses may differ materially from the estimates disclosed above. The company expects to incur charges related to its decision to exit and sublease or cease use of certain facilities under the Real Estate Reduction Plan. At this time, the company cannot reasonably estimate these charges, total costs or an estimated range of total costs associated with the plan or an estimate of the amount or range of amounts that will result in future cash expenditures. The company will file an amendment to this Current Report on Form 8-K once it makes a determination of such estimates or ranges of estimates, if any," the filing stated.