(Image source: Retail Dive)
Rent the Runway is an e-commerce platform that enables users to rent, subscribe, or purchase designer clothing and accessories. The company recently announced its registration with the U.S. Securities and Exchange Commission. Rent the Runway is in the process of finalizing documents and will list its stock on the Nasdaq Global Select Market under the ticker symbol “RENT.”
The company has been losing money – 2020 net loss reached $171.1 million, from $153.9 million in 2019. On the other hand, consumers’ interest in sustainability, normalization of secondhand clothing and the growth of e-commerce, are working towards Rent the Runway’s favor.
The company created the “closet in the cloud” concept, which is accessible for all of its subscribers. These subscribers are their main source of income. They have contributed 83% of the total revenue in the first half of 2021. It took some time for the retailer to figure out the best subscription plans for its customers but it seems like they have it under control now.
The pandemic last year slowed the business down due to the dip in special events, social gatherings and interactions. A significant number of customers paused, canceled or downgraded to lower-price plans. This is one of their bigger challenge that they are still working on to resolve. To address other logistical challenges of online retail, they partnered with Nordstrom and WeWork to set-up physical locations for pickups and drop-offs.
Source: Rent the Runway files for IPO