Rent The Runway and the ‘end of ownership’ question
The fashion rental service is trying to go public with major losses. Risqué, or just risky?
While many e-commerce businesses thrived during the peak pandemic months of 2020, Rent The Runway was hit hard.
With special events and celebrations postponed, offices closed, and sweatpants in full effect, 60% of the online fashion rental service’s subscribers — who no longer needed unlimited access to designer clothing and accessories — canceled or paused their memberships.
The company, which had grown rapidly after launching subscription plans in 2016, laid off a third of its workforce and closed its five retail locations.
Now, Rent The Runway, led by co-founder and CEO Jennifer Hyman, is trying to go public, as soon as next week. The company is growing again, and has passed the 100,000-active-subscriber mark for the first time since early 2020.
In theory, this is the sort of service that should bounce back as pre-pandemic life gradually sets back in — especially if consumers decide to prioritize sustainability and see renting clothes as both environmentally and financially savvy.
But its prospectus, amended this week with some new data, reveals a capital-intensive business with major losses and real question marks.
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