Lease the runway information for the IPO and think about losses in the course of the pandemic
Jennifer Hyman, Rent the Runway
Scott Mlyn | CNBC
Rent the Runway filed for an IPO on Monday and announced that its subscriber base fell during the Covid pandemic but has since started growing again.
The digital apparel rental platform also showed its losses increased in 2020, and sales were hurt by fewer women freshening their wardrobes.
The company plans to trade on the Nasdaq under the ticker symbol “RENT”.
Last year, Rent the Runway’s total subscriber base – including those who had suspended their memberships – was 95,245, compared to 147,866 in 2019. Last year, there were 54,797 active subscribers, up from 133,572 in 2019.
However, this year the company started winning back some customers. Rent the Runway had a total of 126,841 subscribers in the six months ended July 31, compared to 108,752 in the same half of 2020. During that period, it had 97,614 active subscribers, compared to 54,228 in 2020.
“We couldn’t have foreseen the global pandemic and the resulting struggle for our survival,” said Jenn Hyman, co-founder and CEO, in a memo attached to the SEC filing. “Today Rent the Runway has gotten stronger.”
The company’s revenue declined to $ 157.5 million last year, from $ 256.9 million in 2019.
The net loss in 2020 was $ 171.1 million, higher than the previous year’s net loss of $ 153.9 million.
In the six months ended July 31, Rent the Runway lost $ 84.7 million on revenue of $ 80.2 million.
The company cites the rapid growth of online shopping and the importance of sustainability as positive factors. But Rent the Runway also mentions in its S-1 filing that it needs to “normalize” the rental and resale of clothing for consumers in order to further grow its subscriber base.
Founded in 2009, Rent the Runway is an online platform that offers users multiple subscription options to rent clothes and accessories from designer brands on a monthly basis. For example, a subscriber could borrow eight articles per month at a monthly rate of $ 99 for the first two months, and then $ 135 for each month thereafter.
During the pandemic, Rent the Runway closed its existing brick and mortar retail stores and revamped its subscription plans, leaving an unlimited option. It has also been introduced to the resale market, which does not require membership to purchase items from its website.
In order to increase sales in the future, Rent the Runway plans to enter new categories and expand internationally.
When it goes public, Rent the Runway will link up with companies like Poshmark and Thredup, which also appeal to consumers interested in sustainable shopping. And it comes after eyewear retailer Warby Parker went public through direct listing last week. The sustainable shoe brand Allbirds also has an expected IPO in the pipeline.
Last fall, Rent the Runway raised a $ 750 million valuation round of funding, losing the multi-billion dollar unicorn status it cemented in 2019.
Rent the Runway had confidentially applied for public listing in July.
Goldman Sachs, Morgan Stanley and Barclays are the lead underwriters for the offering.
Read the full S-1 filing with the SEC here.