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(CNN Business) —  

Wall Street is jumping on the resale clothing and handbag bandwagon.

Shares of resale website The RealReal (REAL) soared in their stock market debut Friday. The stock was last trading for about $28 a share — 40% above the company’s $20 IPO pricing.

The RealReal is an online marketplace for buying and selling authenticated luxury brands, including Cartier, Chanel, Christian Louboutin and Gucci. In other words, it’s a consignment shop for the internet age. The company raised $300 million from its public debut.

The successful IPO is the latest sign of growing interest in the secondhand fashion market. The industry is expected to double from $28 billion today to $51 billion by 2023, according to a GlobalData Retail research report prepared by resale site ThredUp.

The RealReal was founded in 2011 by Julie Wainwright, the former CEO of Pets.com. The website had $207 million in sales last year, according to paperwork filed with the Securities and Exchange Commission.

The company generates most of its revenue by taking a cut of sales from the purchases made on its website, through its app and at its three physical stores. Its average order last year was $446.

It has also tried to distinguish itself by offering a consultation service for top customers who want to unload their old stuff. And the company has hired a team of gemologists and horologists to inspect and authenticate luxury jewelry and watches.

The RealReal has three stores total in New York and Los Angeles, and it plans to open more. Like many other online startups, however, The RealReal is not profitable. It lost nearly $76 million last year, according to government filings.

The RealReal has three stores, including one in Los Angeles. It plans to add more.
PHOTO: Bryan Dale
The RealReal has three stores, including one in Los Angeles. It plans to add more.

Startups such as The RealReal ThredUp, Poshmark and Fashionphile have appealed to younger, environmentally conscious and aspirational luxury shoppers who want discount prices on high-end brands. Their success has even pushed traditional retailers like Neiman Marcus and H&M to enter the resale industry in recent months.

In the last 15 years, clothing production around the world has doubled, even as the average number of times people wear their outfits has fallen, according to the conservation organization Ellen MacArthur Foundation.

However, waste in the clothing and textile industries is becoming a top concern for younger shoppers.

“We believe a growing awareness of the environmental impact of recirculating luxury goods significantly contributes to the appeal” of the company, The RealReal said in its securities filing.

64% of The RealReal’s Millennial shopping base cite the environmental impact and their desire to extend the lifecycle of luxury goods as key motivators leading them to secondhand markets, according to the company’s survey data.

The RealReal is also benefiting from shoppers who are hunting for bargains, regardless of their income level.

Resale is a “gateway to luxury brands for aspirational consumers,” The RealReal said in its filing. “Even affluent consumers are searching for value.”