There was once a velveteen rabbit, and in the beginning he was really splendid. He was fat and bunchy, as a rabbit should be; his coat was spotted brown and white, he had real thread whiskers, and his ears were lined with pink sateen. (1)
When our story starts the Rabbit is in pretty great shape. He's a Christmas present who's bright and shiny and new so of course he's pretty proud of his appearance.
The Rabbit could not claim to be a model of anything, for he didn't know that real rabbits existed; he thought they were all stuffed with sawdust like himself, and he understood that sawdust was quite out-of-date and should never be mentioned in modern circles. (3)
The Rabbit's not totally dense. He knows that he's only a stuffed animal made of sawdust, which isn't as fashionable as the mechanical toys in the nursery. He may have pretty velveteen fur, but even he knows not to get too full of himself when it comes to looks.
[The Skin Horse] was so old that his brown coat was bald in patches and showed the seams underneath, and most of the hairs in his tail had been pulled out to string bead necklaces. (4)
The Skin Horse might not look fancy, but the Rabbit can tell that beauty is only skin deep. The Skin Horse's appearance means he's been through some stuff.
"By the time you are Real, most of your hair has been loved off, and your eyes drop out and you get loose in the joints and very shabby. But these things don't matter at all, because once you are Real you can't be ugly, except to people who don't understand." (10)
So in order to become Real, you've got to become ugly. Except you won't really be ugly according to the Skin Horse. Whoever makes you Real will see the beauty on the inside. Aww.
[The Rabbit] longed to become Real, to know what it felt like; and yet the idea of growing shabby and losing his eyes and whiskers was rather sad. He wished that he could become it without these uncomfortable things happening to him. (13)
So the Rabbit is a little skeptical of all this Real business. Sure, he'd like to become Real, but he's not too thrilled about the fact that he's got to lose his looks to do it. Hey, some toys are vain.
And so time went on, and the little Rabbit was very happy—so happy that he never noticed how his beautiful velveteen fur was getting shabbier and shabbier, and his tail becoming unsewn, and all the pink rubbed off his nose where the Boy had kissed him. (18)
Ah, but once the Rabbit gets to know the Boy and starts to love him, he doesn't mind that he's getting all shabby and beat-up. The Rabbit loves the Boy and the Boy loves him back and appearances don't matter anymore. That's real love.
They were rabbits like himself, but quite furry and brand-new. They must have been very well made, for their seams didn't show at all, and they changed shape in a queer way when they moved; one minute they were long and thin and the next minute fat and bunchy, instead of always staying the same like he did. Their feet padded softly on the ground, and they crept quite close to him, twitching their noses, while the Rabbit stared hard to see which side the clockwork stuck out, for he knew that people who jump generally have something to wind them up. But he couldn't see it. They were evidently a new kind of rabbit altogether. (27)
When the Velveteen Rabbit first runs into the wild rabbits he doesn't know what to make of them. He figures they must be some really well made toys because they're hopping around like crazy. He definitely doesn't want them to see how badly made he is. Poor little guy is still embarrassed by the way he looks.
[The Rabbit] scarcely looked like a rabbit any more, except to the Boy. To him he was always beautiful, and that was all that the little Rabbit cared about. He didn't mind how he looked to other people, because the nursery magic had made him Real, and when you are Real shabbiness doesn't matter. (51)
The Skin Horse was totally right. The Boy doesn't care that the Rabbit looks like a hot mess and the Rabbit doesn't mind that he's not all new and pristine anymore. All that matters is that they have each other.
That night the Boy slept in a different bedroom, and he had a new bunny to sleep with him. It was a splendid bunny, all white plush with real glass eyes, but the Boy was too excited to care very much about it. (62)
Oh, man. This one hurts. So the grown-ups get rid of the Rabbit and then buy the Boy a replacement and he's just…cool with it? Give the kid a shiny toy and he'll just move along? Et tu, Boy?
The Boy went out to play in the wood behind the house. And while he was playing, two rabbits crept out from the bracken and peeped at him. One of them was brown all over, but the other had strange markings under his fur, as though long ago he had been spotted, and the spots still showed through. And about his little soft nose and his round black eyes there was something familiar, so that the Boy thought to himself: "Why, he looks just like my old Bunny that was lost when I had scarlet fever!"(79-80)
All right, so the Boy redeems himself here. He sees the wild rabbits playing outside and notices the spots on the Rabbit's fur. Then he remembers his old bunny that he loved so much but that got "lost." (Oh, the lies adults tell.) So at least the Boy never forgot his little Rabbit friend.