Rent the Runway to cut workforce as consumers cut back

In a filing with the Securities and Exchange Commission this week, Rent the Runway listed the size of its offering as US$100m.

The company struggled in the early months of the pandemic, according to reports, and saw its valuation drop to $750m from $1bn, resulting in staff cuts and store closures.

Co-founder and CEO Jennifer Hyman said in the filing: “In the years to come, we look forward to bringing the magic of Rent the Runway to more customers, and to any thing we don’t need or want to own forever. Our flexible platform has the potential to power not just the Closet in the Cloud – but our lives in the cloud. This means more money saved and a more sustainable future for us all.”

In the six months to the end of July 2021, Rent the Runway achieved revenues of US$88.5m from $80.2m a year earlier, but net losses reached $88m from $84.7m last year.

“We are witnessing trends that are driving consumer and brand behaviour in our favour, though the extent to which they may be impacted by the Covid-19 pandemic remains uncertain,” the company said.

The company has outlined is growth strategies as including: growing subscribers; expanding its assortment; launching new categories and offerings; and expanding internationally.

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The offering is being led by Goldman Sachs Group Inc., Morgan Stanley and Barclays Plc. The shares are expected to trade on the Nasdaq Global Select Market under the symbol RENT.

Rent the Runway is one of a number of fashion companies to file for IPOs this year. Sustainable footwear and apparel company Allbirds is hoping to pioneer a framework for companies to conduct a Sustainable Public Equity Offering, or SPO.

While Adidas is a key investor in the planned initial public offering by Finnish sustainable fibre producer Spinnova.