Rent the Runway files for IPO
Rent the Runway is the latest digitally native retailer seeking to enter the public arena.
The fashion rental giant on Monday filed for an initial public offering seeking to raise $150 million, after confidentially filing for a listing in July. The number of shares on offer and their price range have not yet been determined. The company plans to list on the Nasdaq exchange with the ticker symbol “RENT.”
Rent the Runway was hit hard by the pandemic as wedding and other dress-up events were canceled and women put wardrobe refreshes on hold. It subsequently closed its brick-and-mortar locations, updated its subscription plans and entered the resale market.
[Read More: Rent the Runway jumps into fashion resale market]
Similar to other digital-first retailers such as Warby Parker and Allbirds that have filed to go public in recent months, Rent the Runway's filing revealed that it has been losing money. The filing also revealed an uneven recovery from the pandemic to date. Rent the Runway’s revenue fell to $157.5 million in 2020, from $256.9 million in 2019. Its net loss totaled $171.1 million in 2020, compared to a net loss of $153.9 million in 2019.
For the six months ended July 31, Rent the Runway lost $84.7 million on revenue of $80.2 million. On the positive side, the company’s subscriber base has started to grow again after plummeting in 2020. It has 126,841 total subscribers in the six months ended July 31, compared with 108,752 in the year-ago period. It had 97,614 active subscribers over the period, compared with 54,228 in 2020.
Rent the Runway, which launched in 2008, acknowledged the losses in the registration statement’s warnings to investors.
"As of July 31, 2021, we had an accumulated deficit of $674.1 million,” the company stated. “Because we have a short operating history at scale, it is difficult for us to predict our future operating results."
In its filing, Rent the Runway said its growth strategies include growing its subscriber base, expanding its assortment via new brand partners, launching new categories and international expansion. Its lineup currently features more than 18,000 styles from more than 750 brands.
Rent the Runway raised funds last year at a valuation of $750 million, below its previous valuation of $1 billion, Bloomberg News reported in June.
Goldman Sachs & Co, Morgan Stanley and Barclays are the lead underwriters for the offering.