Executive Briefing
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?
By Dan Frommer on Saturday, October 23, 2021 at 8:00 am
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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