Thursday, December 2, 2021

Rent the Runway, second-hand, fashion site, debuts in trading

Rent the Runway began trading in public markets on Wednesday, testing investor appetite for its clothing rental model after a tough year.

The listing represents an important milestone for the venture capital company founded in 2009 by Jennifer Hyman and Jennifer Carter Fleiss. The stock started trading above the IPO price of $ 21, but during the day their earnings plummeted and they closed at $ 19.29, down about 8%.

Rent the Runway was created to rent out evening dresses for special occasions such as weddings. Since then, the company has gone beyond renting clothes for the weekend, aiming to offer people a “closet in the cloud” through subscriptions. Rent the Runway aims to get subscribers to pay a monthly fee to access a wide range of apparel, jewelry and bags. Subscribers can change their choice several times a month.

In its IPO filing, Rent the Runway pointed to a combination of factors contributing to its continued growth, including a “move from ownership to access,” as evidenced by the popularity of companies such as Netflix and Airbnb, an increased interest in sustainability, and an increase in the number of women employed. who spend more on workwear than their male counterparts.

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The company priced the offer at $ 21 a share, the upper end of the $ 18 to $ 21 range that the company was selling. He also expanded the offering to 17 million shares, up from the 15 million originally planned. He plans to use the proceeds to pay off debt and finance the company’s expansion.

However, the pandemic has hit the company, which is still trying to restore the momentum it had in 2019. Rent the Runway is optimistic about the recovery this year, but documents show just how severe the damage was: last year the company finished with 54,797 active subscribers and $ 157.5 million in revenue, compared with 133,572 active subscribers and 256.9 million. dollars of income in 2019. The number of active subscribers as of September 30 was 11,732 people.

Nation World News Desk
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