Ladies and gentlemen, thank you for standing by and welcome to The RealReal Second Quarter 2020 Financial Results Conference Call. At this time, all participants are in listen only mode. Later, we will conduct a question and answer session and instructions will follow at that time. As a reminder, this conference call is being recorded. I would now like to turn the call over to your host, Mr.
Paul Bieber, Head of Investor Relations. Thank you, sir. Please go ahead.
Thank you. Good afternoon, and welcome to The RealReal's earnings call for the quarter ended June 30, 2020. I'm Paul Beever, Head of Investor Relations at The RealReal. Joining me today to discuss our results are Founder and CEO, Julie Wainwright and Chief Financial Officer, Matt Gutzke. Hopefully, you can have a chance to read our press release and stockholder letters that we distributed earlier today, both of which are available on our Investor Relations website.
Before we begin, I'd like to remind you that we will make forward looking statements during the course of this call. These forward looking statements involve known and unknown risks and uncertainties, and our actual results could differ materially. You can find more information about these risks, uncertainties and other factors that could affect our operating results in our most recent periodic report on Form 10 ks, subsequently quarterly reports on Form 10 Q and in our earnings release from earlier today. In addition, our presentation will include certain non GAAP financial measures, for which we have provided reconciliations to the most comparable GAAP measures in our earnings press release. With that, I'll hand the call over to Julie for introductory remarks and then we'll go straight to Q and A.
Thank you, Paul, and thank you all for joining us today on this call. Since we reported our Q1 results in early May, GMV trends have improved significantly, with May down approximately 19% year on year, June down 8% year on year and importantly, we have continued the positive trend into July with GMV decreasing by only 2% year on year for the month. Our GMV recovery prompted us to begin reinvesting in growth in Q2 earlier this than we previously anticipated. While Q2 was challenging, the pandemic has been a catalyst for reinvention and innovation at The RealReal. With the normalization of our processing capacity and the evolution of our supply acquisition strategy, we are now laser focused on returning to sustained growth.
With that, I'd like to turn it back to the operator for questions. Thank
Your first question comes from the line of Michael Binetti with Credit Suisse. Your line is now open.
Hey, guys. It's Michael. Thanks for all the detail on the presentation today. So I want to focus on July for a minute. It sounds like GMV down 2.
Can you speak to some of the other underlying metrics that you gave us help with? What's driven the acceleration here? And it looks like you're I think last time we talked to you, you had anticipated that you crossed back into positive territory at some point before the end of the year. It looks like there's a chance to do that this quarter. Is there any reason, be it tougher comps in July or anything like that, that you think there's some headwinds ahead that we should think about that would make that not possible?
I'm going to start and then I'll kick it over to Matt. We're really excited about July. Really what's happened is July I mean previously in Q2 our business was suppressed both by operating capacity, social unrest and also business not returning to normal. We're seeing that all change in July. Our stores opened in July later than we thought, but now we have all of our stores open.
New York returned to growth in the month of July. LA is still lagging slightly due to increased COVID, but we expect that to continue. So regardless of comps last year, what we see in front of us is growth on GMV and product coming in, which will then in turn lead to growth in GMV. So I'm going to turn it over to Matt.
Yes. Thanks, Michael, for the question. So just to point out a couple of things that were in the shareholder letter here. So you're right on GMV growth that improved to negative 2% in the month of July. That was on supply growth that was plus 3% year over year.
So we've returned back to net growth in incoming supply. That is both of the I mean, they're obviously highly correlated, But the in essence, the recovery is a bit steeper than we anticipated a quarter ago, and that's obviously a good thing. In terms of how we see it playing out over the next couple of months and through the Q4, obviously things are quite fluid. So take everything with a grain of salt. But in the immediate term, we see July basically staying right around Q3 staying right around the July level because to your point, we are lapping a very strong Q3 of 2019 where our GMV growth rate is up about 10%.
So notwithstanding the comping difficulties, underlying that is just sort of steady underlying improvements, starting with supply. We do see a path to positive year over year growth in Q4 at this point.
Let me ask let me follow that, Matt, with you guys you have a lot of your business in New York and LA and you may have mentioned this in the PowerPoint and I missed it. But the supply returning to positive, is that I mean, did you get back to positive without much contribution from New York? I know a lot of your core consignor base is outside of the city and perhaps not doesn't have access to their full closet at this point. And then I guess the last one is within the demand growth on GMV as you get to that negative 2% number in July, are you seeing some of the components of that that have been the headwinds like the UPT? It seems like to me in April, you just didn't have the inventory for buyers to add a unit to the basket when they came to you and the supply improving.
Are you seeing UPT improve? Is that of the help in getting to the negative 2 in July?
So again, I'll start and then I'll kick it over to Matt. Actually, New York had a positive comp on the year for the month of July despite many of the New Yorkers out of and the people live in Manhattan specific still not returning to the city. So we feel really good given the fact that we did grow in New York despite that, that we are well positioned for growth when they do return. So supply was strong and showed rapid growth in some cities. Again, the only market that's lagging in the month of July was L.
A, which we do expect to return as COVID actually subsides and people get more normalized in their day to day activity. On the UPT, I'll let Matt answer that specifically, but we do have an interesting phenomenon going on right now. On the product coming in, the average selling price for us is roughly the same as if we would have gone to people's homes. The curbside pickup and the virtual appointments are working in that way. But in general, what people are purchasing are actually a higher about are higher value thing.
So handbags and jewelry in particular along with home and art are selling better than we would have anticipated and the lower value things like apparel, especially contemporary apparel are lagging. So consequently without a strong UPT because it has ticked up a little, but isn't at where it was before it. 2, our AOV actually gave us one of the best months in July that we've ever had. And that again is a shift in the buying mix.
So you don't need to write this down. So I'm just going to reiterate a couple of the numbers that are in the shareholder letter for clarity. The overall supply was up 3%. New York for the month was down 1%, so basically flat. LA was down 11% versus being down 25% in the prior month, so improving as well.
And that left everything else at positive 8% for the month. Some of that benefit does come from continuing strength in the vendor channel, but broad based across all of the other regions we are seeing a return to positive year over year comps.
Okay. Thanks.
I missed it
in the last.
Thanks a lot.
That's okay. So then adding to what Julia was saying on unpacking AOV in essence. So ASP has been very strong throughout and has really recovered from where we were in April. Every month has increased and July was actually up 12% year over year. UPT or units per transaction has begun a recovery, but it's still substantially below pre COVID levels.
And we'd expect that to continue until our overall available supply balance is back to positive year over year at some point in the hopefully not too distant future. So AOB as a result is the recovery has been as a result of ASP stabilizing and improving.
Thanks a lot.
Your next question comes from the line of Oliver Chen with Cowen. Your line is now open.
Thank you. Hi, Julie. Hi, Matt. The supply detail is really helpful. It looks like New York bounced back a little more strongly sequentially than LA.
Do you what do you expect for Q3, Q4 in terms of supply units? Do you think New York will stay will turn positive? Is that underlying your views on Q4? And then will LA turn positive, negative 11 in July? And then bigger picture, will those two Sure.
So, of course, we don't know, we
Sure. So of course, we don't know with high levels of precision, but here's what we're seeing at a micro level for both of those markets. So New York, the recovery has been quite substantial. And I think I can we can attribute some of it to what we're seeing and you're living in New York that New York has done a comparatively good job at managing COVID and the city is slowly coming back to life and our consignors are slowly coming back home. So we see that and that's assisted by the opening of our stores a little over a month ago that helps on the margin.
So unless we see a change in those trends if COVID worsens, I think it's reasonable to expect that New York will be back to positive year over year growth now for this quarter and strengthening into Q4. LA has sort of the flip side of that where the area has done less well at managing the spread of COVID.
In fact, it's kind
of it's getting progressively worse in California, particularly in Southern California. So no doubt we're seeing that impact. Though even within that we are seeing recovery. Again, our stores open there. So on the margin that's helping.
I think it would be too soon to say that whether LA can return to positive comps in Q3, unlikely, but I think a recovery broadly, I think we're comfortable with. And in terms of where they those markets go long term, we've really even in those markets, which are our most penetrated, we're still barely scratching the surface in consignor penetration and buyer penetration. So they will always be, I think, our largest markets and they can continue to grow for many, many years to come. But certainly they'll be our largest markets. But the rest of them have even more growth potential than they do.
Yes. And you made a proactive strategic decision to reinvest in marketing starting in mid May. Why was that the right time? And what kind of marketing comparisons are you up against? How are you thinking about managing marketing as we model that in the next quarter and look at the interplay between marketing relative to demand?
Sure. I'll take that one. So it was clear by the time we got frankly, by the time we got through April that we felt like the worst was sort of behind us and we started our planning around what would it take to make us confident to start reinvesting in growth. The reopening or not reopening, the loosening of restrictions on our Brisbane facility in or very early May, I think we talked about in the last call, That was the big thing that gave us the confidence that we could process the units if we brought them in, and marketing ultimately is driving supply as well as demand. So once all of those things lined up, we felt that it was we were comfortable to start leaning in a little bit, but in a relatively moderate way.
And as we started to see the results in terms of traffic, in terms of supply rebuilding, then we just leaned more and more into it, such that by the time we got through June, we were almost back to pre COVID levels of spend, which is about $4,000,000 to $5,000,000 per month. Going forward, unless things change, that's what you should expect, dollars 4,000,000 to $5,000,000 of marketing per month for the balance of the year.
Thank you. Best regards.
Yes. Thank you. Thanks, Oliver.
Thanks, Oliver.
Your next question comes from the line of Eric Sheridan with UBS. Your line is now open.
Thank you very much. This is actually Alexandra on for Eric. Two questions, if I may. One follow-up on the investments you announced or you started early in Q2. What are kind of like the key areas of investment there?
And just wanted to understand if and how your long term investment priorities might have changed now with COVID? Thank you so much.
Okay. Definitely 2 different questions. So the first, it's really a reversal of everything that we identified that we were going to pull back on operating expenses when COVID initially hit. So, 1st and foremost was marketing. We just covered that kind of how we went back went down.
Now we're kind of progressively building back up. Next was a variety of payroll related expenses. We furloughed about 15% of our staff. We had a layoff of about 10% of our staff and various other things. We didn't give raises, suspended bonuses, etcetera.
At this, we are building back, so there almost no one left on furlough, and we have begun selectively hiring across the business, particularly in our technology organization. It's been driving tremendous innovation for us. And most recently in our sales organization, we're going to hire relatively aggressively in sales in the back half of the year to support our return to strong sustainable growth. So in terms of how that informs our priorities going forward, I would say there's no significant impact. I would point to the innovations that have come as a result of COVID that have been focused in our sales organization having to reinvent our supply acquisition strategy altogether, leading into virtual appointments, adding in self scheduling.
So these are potential unlocks to sales productivity over time. So that doesn't necessarily mean we invest more in sales, but we're getting the returns from our technology investments. So we feel kind of emboldened to continue leading in there. But over time, I think what we're experiencing during COVID is that we see a path to potentially stronger unit economics longer term as a result of the efficiencies that we've gained during COVID. And as an aside, it's very difficult talking through masks, which we're doing.
Your next question comes from the line of Ed Yruma with KeyBanc Capital Markets.
Hey, guys. Thanks for taking the question. 2 quickly from me. I guess, first on the vendor side, you guys indicated that you had some strong success there. I think it was up close to 20% from an inventory perspective.
I guess kind of what's the stability of that channel? It a short term phenomenon or do you think you can continue to lean on that? And then second, in areas where you have reopened physical locations, I guess kind of what are you seeing both on the sell side and the buy side? Thanks.
Okay. So I'll start on vendor and then maybe Julie you can start with your thoughts on stores and I'll chime in. So the vendor channel, as you mentioned, is doing well. So GMV, I think is what you're referring to is up 19% year over year in the quarter. Our supply actually in vendors up a bit more than that.
So that continues to be a comparatively strong channel for us and we'd expect to see that continuing certainly for the balance of this year and probably realistically through next year we'll remain at elevated levels, but not a focus, a strategic priority to grow that business at a much, much higher rate than it is. So it did tick up from mid 4% or 5% of GMV to about 8% of GMV in the quarter. We'd expect it to be in that neighborhood, but maybe hitting 10%, but probably not much more than that. We do use it to strategically infill product, focused on higher value products, particularly handbags, jewelry, watches. And that's the strategy there.
So did you get the question on stores? Just what are we seeing so far, supply?
So stores have been interesting because right when we opened, we were hit with some social unrest and had to shut down. So they've been open now since about the 3rd week of June. So early data is incredibly encouraging. It looks like right now that in the month of July, they did about 80% of what they were doing pre COVID. And we're getting an appointment for consignments and curbside drop off for consignments was tracking pretty close to the demand.
So we're encouraged by the stores. New York in particular has picked up, LA is picking up. Again, we've got to remember, we only have 4, But we are so encouraged by the stores that you can expect we are going to open 1 more store before the end of the year. We had previously announced that we were going that we had signed a lease to open a store in Chicago. And we are going to go ahead and open it to take advantage of the holiday selling season, which also is a great time for us to get consignment.
That store will open sometime in November.
Got it. Best of luck.
Thank you.
Your next question comes from the line of Aaron Kessler with Raymond James. Your line is now open.
Great. Thanks a lot. A couple
of questions. Maybe first on the services revenues, I noticed that was look like close to 0, I don't know if my math was right there. And then just be curious, are you seeing any kind of countercyclical benefits in any of the markets where maybe consumers are home or they're obviously able to maybe spend more time clearing up
their closets? Are you starting to
see some of that benefit at all right now as well? Thank you.
Well, onto your first question second maybe. So I think we might have to kind of get back to you on understanding that. And I think the question on services revenue, I think just just to remind everybody here, so services revenue is our kind of our is all of the non consigned it's not the direct revenue and it's everything other than the take rate that we get on our consignment sales. So that's predominantly shipping. So there's no particular reason that would have that trend would have been markedly different.
And then the other question, just general supply, I mean, I wouldn't say that we can connect. We haven't certainly done consumer research to understand the motivation during COVID for people consigning, but our supply trends have been consistently more and more encouraging. So certainly to some extent that is as people settle into their stay at home routines, they are cleaning up clauses and doing that. We're seeing broad based strength. Until recently, we weren't seeing that in our largest markets of New York and Los Angeles.
Starting to see that now. There's a case to be made that once New Yorkers come back that there could be quite a strong rebound and a surge of supply coming out of New York for the reason of that dynamic that you mentioned. But broadly, I think the interest in consignment is strong and our value proposition is even stronger in times where value wins and certainly times we're in are that.
Great. And just quickly gross margins were a little bit better on consignment. Is that a mix issue there as well?
A little bit better year over year. How does that translate? Shipping improvements in our shipping expense that we negotiated at the end last part of last year. That's primarily the
reason. Okay. Thank you.
Your next question comes from the line of Ike Boruchow with Wells Fargo. Your line is now open.
Hey, everyone. Good to see the improvement. I guess just for me, maybe Matt, on the take rate you talked about in the quarter, the mix of business kind of driving that down year over year. Just curious, should we expect that mix dynamic to continue into 3Q and 4Q? How are you thinking about how that plays out and then how that flows through into your take rate next quarter and into the back half?
Yes. So we almost always at a steady state, what we saw in Q2, we see in Q4. So always seasonally, we mix up in handbags, fine jewelry, watches in the holiday quarter. We saw that happening earlier. This is more of a COVID effect.
So I don't see that our mix should change dramatically. So our take rate more or less I think is going to be stable in Q3. Maybe we're going to mix up even a bit more because then you're going to have the COVID impact compounded by what people traditionally buy in the holiday season anyway. So I think our ASP is likely to go up even further in Q4, which has a pretty clean correlation with take rate.
Got it. And then just quick follow-up, Matt, you guys have said you're hoping to get positive growth by Q4. You've got the ad spend kind of ticking back up. I'm not sure what else is going on, on the expense side. If you kind of get to where you're hoping you can get on top line to end the year, should the adjusted EBITDA margin also begin to improve or is it not going to work its way out that quickly?
It depends on what yes. So yes, I think as we get back to growth, you're going to start to see EBITDA margin expansion. And that's going to be sort of broad based. The way we're thinking about reinvesting right now, and it's not directly one for 1. Once we saw the positive signs, our primary focus moved to supporting the growth.
Yes, for this year to support a strong close to the year in Q3, Q4, but most importantly to set us up for a very strong 2021. So we're going to continue leaning into that. The effect of that is with the GMV upside that we're seeing versus what we thought a quarter ago, that GMV upside will pay for most of the reinvestment that we're making this year. But we'll generate strong GMV underpinnings for a strong next year that can lead to accelerated operating margin gains, which we'll update as we get closer to that.
Got it. Thanks.
Your next question comes from the line of Rick Patel. Your line is now open.
For discounting in the broader market this fall. A lot of brands and retailers with excess inventory out there heading into fall. So as we think about your outlook for AOV, do you see the changes in product mix being able to offset pricing pressure you could be seeing on like for like categories?
So I'm going to start and I'll kick it over to Matt. Interestingly enough, we have as you know, we have a very diverse category mix. And where we've always seen price compression and the most impact is in apparel. Well, handbags, jewelry, home, art, men's have all popped up. Apparel is actually the slowest to recover.
Consequently, while A, we haven't seen any price compression on the apparel, but more importantly, it's and we expect this to continue as long as people are working from home. It's becoming a less important part of our mix, where it was a women's apparel was a significant part. So we haven't seen it, any price compression or promotional effect, and our mix has changed toward the higher value items, which we do expect to continue. So we're pretty bullish on AOV going forward.
And also
I'm just looking at that. We're in the same room for a change.
Nothing to add. Okay.
Great. And also a question on the growing B2B business. Can you help us understand how this product flows through your business? I'm curious, are you taking on inventory here or is this product drop ship? And then how do you handle returns?
And then is there anything to highlight in terms of how it affects financials differently than the underlying consumer business?
Yes. So let me set a couple of things straight. So we don't really have a B2B business period. So when we refer to our vendor channel, all that really means is that those are businesses who are selling to us, but are consigning with us. The lion's share of that inventory is still same model.
It's a consignment model with take rates, etcetera. So there's no difference in terms of how it's recognized through the financial statements. No inherent differences in return rates. So the mix of products we tend to get to the vendor channel skews more toward bags and watches and they have their own return characteristics and they're generally speaking higher ASP products than what come from individuals. But again, it's relatively small.
And then in terms of what we do have a very small business where we buy upfront and that's not limited to the vendor sellers. We offer that alongside our consignment offering to encourage people to consign. And typically what we're doing that is mostly in handbags, a little bit in sneakers, a little bit in some jewelry. And we just present consignors in our physical locations with options of consign at this rate, get a trade for site credit at this rate or get cash upfront at this rate. And the majority of time choose the consignment options, they're willing to wait to get the highest payout.
So we just find it as a good lever for us to convert consignors.
And then one other thing, they no one dropship from their own facility. We still take possession of every item. We still inspect it for condition. Obviously, if it's coming right from the brand, we know it's authentic. However, we subject and inspect it for condition and we photograph it and then we go through the normal pick, pack and ship and return.
Right. So I think you also asked a question about inventory generally. So I think at the end of the quarter, we had about $20,000,000 of inventory, which is very small. So that's almost all of that is the result of us taking back returns after we paid or committed to pay a consignor. A de minimis amount relates to what I was talking about in our buy upfront program, probably less than 10% of that.
So almost nothing.
I appreciate it. Thanks very much.
Your next question comes from the line of Simeon Siegel with BMO Capital Markets. Your line is now open.
You and the families are doing well through all of this. Congrats on the ongoing sell through trends improvement in supply. Sorry if I missed it and congrats on the GMV sequential improvement. But can you help bridge to the July GMV being down versus the supply being up? I guess also recognizing the July ASP strength that you mentioned.
So how are you thinking through the supply versus demand dynamics now that supply is building? And any thoughts on when demand should catch up to supply given the sell through strength and pent up demand? Thanks.
Sure. So I'll start and then Julie if you have anything to add. So supply generally speaking is a leading indicator for our GMV. So the supply and metrics that we're giving out and we're not necessarily going to continue doing that, but because things are so fluid, we felt that the transparency was appropriate at this point is shift units, which is just basically means that our consignor or our salespeople have shipped one of these units into our facilities. Then it takes there's a certain amount of time it takes to process those and then turn and ultimately turn into sales.
So generally speaking, it's a leading indicator, number 1. 2, our supply has being down substantially year over year for a few months now means that we've had to sell more aggressively into older inventory. So as supply starts to rebuild and gets into significantly positive year over year territory, then you can start to see where that trend starts to change and we're selling more of our GMV coming from newly released products on to our marketplace and they'll tend to correlate pretty well in a steady state. But in a from month to month, you're going to tend to see supply trends lead GMP.
So and then just to add some color, we really expect by Q4, we're going to start showing more positive leading growth on demand as expecting as we expect the build in supply in Q3. So we're we are expecting a return to overall growth and sustainable growth in Q4.
Great. Thanks. And then can you speak to any savings you'll see with the success of the virtual appointments versus in person micro
I can't be super specific on it yet, because obviously we do not have the volume that can test the hypothesis that we could see substantially greater productivity over time. Just not enough data there, but we're optimistic that we could see substantial productivity improvements from our sales team. The reality is virtual is the new norm. Virtual appointments with curbside pickup supported by our growing fleet of vans and more recently assisted by the launch of consignor self scheduling, all those three things fit together to lead to a scenario where we could have substantially greater number of appointments per day per salesperson than in the model where they were traveling in between appointments. So prior to COVID, a good day for a salesperson is 4 or 5 appointments a day.
Without the restrictions of logistics, you could see that increase substantially. So we look forward to the point where we're pushing so much volume and so much consignment through that we can report out on realized productivity gains, but we definitely see the potential for it to be an unlock in our model that we weren't really anticipating as recently as a quarter ago.
Sounds great. Thanks a lot. Best of luck for the rest of the year.
Yes. Thank you. Thank you.
Your next question comes from the line of Susan Anderson with B. Riley FBR. Your line is now open.
Hi, good afternoon. This is Alec Legg on for Susan today. Thanks for taking our question. Just a follow-up on virtual appointments and then in home. So have you been able to resume any in home appointments in any location or do you have any plans to do so in the near future?
And then on virtual appointments, I know that you mentioned that the number of items consigned virtually is generally a lot lower compared to in home. Have you guys seen a trend of increasing number of items? And then also maybe the margin impacts on that?
So I think there's a little confusion. We have prior to COVID, we had inside sales and we had white gloves. And inside sales really was us sending the shipping label for someone to send it in and we get roughly 5 to 6 units an item when they send it in. Virtual and appointments, we went to your home, we're in more like 15 to 18 units for pickup. Our virtual appointment.
So and interestingly enough, the value of those increment of the units from the virtual appointment to the curbside pickup is exactly the same. So the combination of the van pickup with the virtual is working just like the in home consultation. So right now, it looks like a really efficient trade off to keep on moving forward. We do expect as we move forward that some consignors, especially because there's quite often will get people going to big changes where we'll pick up 200 to 1,000 things at one pickup. That in home appointments will return where we'll be getting these huge whale pickups again, but not most likely not this year, but sometime next year.
So we're leaving that option open. But virtual right now, virtual plus curbside pickup is almost, it looks like a more efficient and effective trade off to white glove appointments. Yes. And just to clarify further, so there's white
glove appointments. We can do that. We've chosen an in home white glove appointments. We can do that. We've chosen and our consignors have broadly speaking chosen not to at this point because the virtual appointments are working well.
There's really we're not finding that there's any difficulty or lack of comfort with using the technology. They're converting well. So everybody's happy with it. But as we go forward, I think some more in home is certain to Julie's point is certain to come back into the mix. But I don't personally see a scenario where it goes back the way that it was where we have the majority of our products coming from in home appointments.
I think the new norm virtual is a large component of the new norm.
Got it. Thank you. That's extremely helpful.
Your next question comes from the line of Marvin Fong with BTIG. Your line is now open.
Yes. Thank you. And thanks for taking my questions. I'm glad everyone's safe and okay. I apologize if I missed this.
I hopped on the call a little late, but just two questions. On July, the GMV, very almost hit breakeven. Did you comment at all on the linearity of GMV growth in the month? Was there actually any period of time where GMV actually broke positive? Would love to get some additional color on that.
And then secondly, I'm just curious if you have seen in the 4 or so months that we've been in lockdown, if you've commented, forgive me again, but are you seeing abnormally large growth in your and the number of consignors and relatedly any noticeable change in the motivation for people consigning? Is it related to economic distress or is it the normal reasons? That'd be great. Thank you.
Sure. So I'll start with the GMV linearity and I'm not going to get into day by day. But yes, I mean, technically speaking, there were periods in the month where we were seeing positive year over year comps, but there's a lot of reasons that can happen, including what day of the week is different, the timing of our promotional cadences, etcetera. So it's actually I don't find it particularly helpful to granulate even further than what we did on a monthly basis. Going forward in the at least for the rest of this quarter, from a growth rate perspective, I'm not expecting that same type of linear improvement because we're comping a very strong Q3 of 2019, where we saw about 10 points of GMV acceleration.
So holding right around this level is in effect continuance of our recovery. We do expect to see continuing supply strengthening, which will support a reacceleration from a growth rate perspective in both GMV and supply in the Q4 as we currently see it. And then your other question around just motivation, there was a question earlier around just kind of motivations of consignors and just kind of strength of new consignors, buyers, etcetera. I would say there's no real trends that we can draw. We've always benefited from a very strong, highly engaged base of buyers and consignors.
And we were spending very little on marketing. It was really our base that carried us through. And as we've started to reengage and invest more in marketing, we're starting to see recovery in new consignors and new buyers as well. And that's of course over time is necessary to support substantially larger
Your next question comes from the line of Kathy Hulberg with D. A. Davidson. Your line is now open.
Hi, everyone. Thanks for taking my question. I was just wondering if you guys had any sort of sense of sort of the promotional activity. I mean, are you seeing anything specific to apparel or jewelry or handbags for that matter? Thank you so much.
So in the past this is Julie, obviously. In the past, we've actually seen price compression as mostly the department stores move product. And there's a different phenomenon and it's mostly on apparel. There's a different phenomenon happening this year. Apparel is women's apparel specifically is less has lessened as a percent of our mix by just a few points, but handbags, fine jewelry and handbags in particular, fine jewelry, men's, home and art are actually have grown.
Consequently, we haven't overall seen any promotional effect. The other thing that's happening in the again, the online businesses, which are primarily the department stores, is that they are selling through inventory that is more less fresh and more old and perhaps not as unique. So while they would have had their spring season was actually in trouble. And so consequently, they're selling inventory that we threw at a price, which we have been selling the resale. So there's a slightly and I don't have the data, but visually there appears to be a slightly bigger overlap of what we're selling at our site for our normal resale value versus what they're selling for a higher value is new.
So there's still a bigger gap. The other thing I think of note is our ASP in July went up 12% versus the same period year ago. Again showing that there isn't at least at this point, we're seeing a lack of promotional effect in the market.
Right. And even the reverse of that and to some extent, particularly in handbags, we've seen a number of the primary luxury players increase the prices of bags during COVID. So naturally it's going to support increases in resale value and make the value of pre owned and accessibility frankly of being able to get these products even more compelling. So in a lot of sense, it's not particularly surprising that those categories are showing particular strength.
Thank you so much.
I think we got time for one more.
Yes, sir. And you have a follow-up question from Oliver Chen with Cowen. Your line is now open.
Thanks for taking this. Matt and Julie, just these are some factors that are out of your control. But regarding a resurgence or a second wave, what have you seen with trends in California Florida and Texas? And any factors you can have within your control if that's to happen to a greater extent? And would also love your thoughts on how stimulus may have benefited some of your results.
And then Julie, bigger picture, potential partnerships with LVMH or Hermes, what are your thoughts on embracing other companies and working with some of the luxury brand houses?
So I'm going to start and Matt can follow-up and start with all of it. So we have there has been a resurgence in Texas, California, Florida. But I have to say the only market that's been negatively impacted for us is L. A. The other markets are really still growing and I really believe that's because of the safety measures we put in place where we where it is a curbside pickup with a virtual appointment.
So the appointments people are willing to consign and wanting to consign. Actually there's very little human touch with that and they feel very safe consigning. So we feel that that will continue. LA just really needs to be a turnaround. We did have a double whammy there.
We had social unrest. We had our store closure and then we had our office closure. And LA has seen a resurgence in COVID. So that one's a little harder to predict. But even in July, it's already it already started to look better.
So there's that. Now the second part of the question
Brand relationships.
Brand relate Oliver, we continue to work on it. We certainly would love to be in a position to announce one. We were in a relationships are being we're in discussions, continue to be in discussions and just stay tuned to this channel. So let's just say that COVID put a change in plans, but I expect that the relation a couple relationships will merge shortly.
Yes. And the third part was stimulus. And
Hard to know.
Hard to know. But I'm not expecting that if there is not a new stimulus program, I'm not expecting to see any significant impact. I don't think that there's particularly a high overlap between those receiving stimulus payments and our core customer and consignor base.
Very helpful. Thank you. Best regards.
Thank you.
So at this, I think we're closing the call and we appreciate all the participation, the good questions. I want to close to say, the company's priority is safety for our employees, but also to cautiously reinvest to support the growth that we really are seeing and expect to see going forward. So we look forward to talking to you again after Q3.