Rent the Runway files for IPO, reveals the losses accumulated during the pandemic

Rent the Runway filed an initial public offering on Monday and revealed that its subscriber base fell during the Covid pandemic but has since started to grow again.

The digital clothing rental platform also showed its losses increased in 2020, and sales were penalized as fewer women refresh their wardrobes.

The company plans to list on Nasdaq with the ticker symbol “RENT”.

Last year, Rent the Runway’s entire subscriber base – including those who had suspended their subscriptions – stood at 95,245, up from 147,866 in 2019. It had 54,797 active subscribers during the year. last, compared to 133,572 in 2019.

This year, however, the company has started to win back some customers. Rent the Runway had a total of 126,841 subscribers during the six-month period ended July 31, up from 108,752 during the same six-month period in 2020. It had 97,614 active subscribers during that period, up from 54,228 in 2020. .

“We could not have foreseen the global pandemic and the ensuing struggle for our survival,” said Jenn Hyman, its co-founder and CEO, in a note included in the SEC filing. “Today, Rent the Runway came out stronger.”

The company’s revenue fell to $ 157.5 million last year, from $ 256.9 million in 2019.

Its net loss amounted to $ 171.1 million in 2020, which is higher than the net loss of $ 153.9 million recorded the previous year.

For 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 in online shopping and the importance of sustainability as factors working in its favor. But Rent the Runway also says in its S-1 file that it needs to “normalize” the rental and resale of clothing to consumers in order to continue growing its subscriber base.

Founded in 2009, Rent the Runway is an online platform that offers users several subscription options to rent designer brand clothing and accessories on a monthly basis. For example, a subscriber can rent eight items per month at a monthly rate of $ 99 for the first two months, then $ 135 for subsequent months.

During the pandemic, Rent the Runway closed its existing retail stores and revamped its subscription plans, ending an unlimited option. It has also entered the resale market, where no membership is required to purchase items from its site.

To increase sales in the future, Rent the Runway has announced its intention to enter new categories and expand internationally.

By going public, Rent the Runway will join Poshmark and Thredup, which are also appealing to consumers interested in sustainable purchases. And it comes after eyewear retailer Warby Parker released a direct listing last week. Sustainable shoe brand Allbirds is also planning an IPO.

Last fall, Rent the Runway raised a fundraiser at a valuation of $ 750 million, losing the billion-dollar unicorn status it cemented in 2019.

Rent the Runway had confidentially filed a public listing request in July.

Goldman Sachs, Morgan Stanley and Barclays are the main underwriters of its offer.

Read the full S-1 filing with the SEC here.