Fashion rental company Rent the Runway discloses drop in revenue in IPO filing
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A person moves through clothing in the storage area at Rent the Runway's "Dream Fulfillment Center" in Secaucus, New Jersey, U.S., September 11, 2019. Picture taken September 11, 2019. REUTERS/Andrew Kelly/Files
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(Reuters) - Fashion rental company Rent the Runway on Monday made public its paperwork for a U.S. stock market flotation, joining a bunch of retailers looking to cash in on the record boom in capital markets since last year.
In its filing with the U.S. Securities and Exchange Commission, the Brooklyn, New York-based company disclosed a near 39% drop in revenue for the fiscal year 2020.
Rent the Runway, which was founded in 2009, lets users rent clothes and shop second-hand merchandise from over 750 designer brands. It had confidentially filed for a listing in July.
The company reported 2020 revenue of $157.5 million, down from $256.9 million a year earlier. Its net loss widened to $171.1 million in the same period, from $153.9 million a year earlier.
The company's top-line also took a hit in the first half of this fiscal year, with revenue down 9% for the six months ended July 31.
Rent the Runway raised funds last year at a valuation of $750 million, below its previous valuation of $1 billion, Bloomberg News reported in June. (https://bloom.bg/3mt348h)
Demand for second-hand clothes has jumped in recent months as customers become increasingly conscious about their carbon footprint, boosting revenues at subscription-based styling service Stitch Fix and online resale shop ThredUp.
Positive investor sentiment and fertile market conditions for new listings also helped other retailers like eyewear company Warby Parker and Roger Federer-backed shoemaker On Holding AG ace their market debuts last month.
Goldman Sachs & Co, Morgan Stanley and Barclays are the lead underwriters for the offering. Rent the Runway will list its stock on Nasdaq under the symbol "RENT".
(Reporting by Niket Nishant in Bengaluru; Editing by Shailesh Kuber)
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