Online clothing rental company Rent the Runway has confidentially filed an initial public offering (IPO) with the Securities and Exchange Commission (SEC), the company said in a press release Monday, July 19.
The company said in a press release that it has yet to determine the amount and price of Class A common shares to offer. The IPO is subject to the SEC review process and is “subject to market and other conditions.”
The company first offered customers the option of renting designer clothes through its common closet. It has since added subscription options and recently a resale market which has 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 valuation for the IPO is not known. But amid the global coronavirus pandemic, which has hit the clothing industry – and in particular the rental and resale markets – the company has closed its five physical stores and laid off nearly half of its workforce.
“With the country working from home and spending nights indoors, rental companies haven’t taken advantage of the current e-commerce boom. To make matters worse, Gen Z is not on board, ”retail tracking company Thinknum reported.
But the market is always changing and digital channels need patience, Jennifer Fleiss, co-founder of Rent the Runway, told PYMNTS in a recent conversation. And despite the issues and the continued need for innovation, digital offerings – along with subscriptions – promise to remain strong.
“Crawl, walk, run,” she said. “What I often see is an entrepreneurial personality [that] just wanna go, come on, come on. How do you reconcile that with the understanding that an industry can take time to evolve and grow, and that it takes patience? “
Rent the Runway offers more than 750 designer brands for rental and resale, according to the press release.