Online fashion rental firm Rent the Runway confidentially filed for an initial public offering (IPO) with the Securities and Exchange Commission (SEC), the firm announced in a press release on Monday (July 19).
The company said in a press release that it has not yet determined the amount and price of shares of Class A common stock to be offered. The IPO is subject to the SEC’s review process and is “subject to market and other conditions.”
The firm first offered customers the ability to rent designer clothes through its shared closet. It has since added subscription options and recently, a resale market that broadened the company’s potential customer base. The resale market is expected to reach $33 billion by the end of 2021, PYMNTS reported at the time.
Founded in 2009, Rent the Runway was last valued at $1 billion after a 2019 funding round. A potential IPO valuation is not known. But amid the global coronavirus pandemic, which pummeled the apparel industry — and especially the rental and resale markets — the firm shuttered its five brick-and-mortar stores and laid off nearly half of its workforce.
“With the country working from home and spending nights inside, rental companies haven’t been benefiting from the current eCommerce boom. To make matters worse, Gen Z isn’t on board,” reported retail tracking firm Thinknum.
But the market is still changing, and patience for digital channels is required, Jennifer Fleiss, co-founder of Rent the Runway, told PYMNTS in a recent conversation. And despite problems and the continued need for innovation, digital offerings — as well as subscriptions — promise to stay strong.
“Crawl, walk, run,” she said. “What I often see is an entrepreneurial personality [that] just wants to go, go, go. How do you marry that with an understanding that an industry can take time to evolve and develop, and that there needs to be patience around that?”
Rent the Runway offers over 750 designer brands for rent and resale, according to the press release.
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