Rent the Runway debuted on the Nasdaq Global Select Market on Wednesday under the ticker symbol "RENT," having increased its offer by 2 million shares, up from its previously announced size of 15 million.
The apparel rental company priced its initial public offering at $21 per share, the top of its previously announced range.
The company was hit hard by the pandemic as demand for apparel ebbed, and tweaked its model this year to expand its opportunity in resale by allowing non-subscribers to purchase used clothing.
Rent the Runway has been in business for a little over a decade, but enters the public market having released scant information about its subscriber base or financial results.
Moreover, the data it does provide are mostly from a period dominated by the pandemic, when consumers had little need to rent or buy new clothes, especially the higher end, special occasion and work clothes that are its specialty.
What is known from its prospectus is that the company has a "history of losses." The numbers of active and total subscribers have improved throughout this year so far, but are both down from 2019. Last year Rent the Runway had nearly 55,000 active subscribers, down from just over 133,000 the year before. Revenue last year fell 39% to $157.5 million, as net loss widened year over year to $171.1 million from $153.9 million.
The company has experienced some recovery in the first half of the year, with about 127,000 ending total subscribers compared to about 109,000 in the same period last year. Revenue reached just $80.2 million, down from $88.5 million in the first half of last year, but net loss narrowed to $84.7 million from $88 million last year.
However, what happened before 2019 remains a mystery, which complicates its picture now or in the future, according to MKM Partners Managing Director Roxanne Meyer.
"While this company has existed for over 10 years, only 2.5 years of financials are provided," Meyer said in emailed comments. "This compressed period (with over half negatively impacted by the pandemic) doesn't allow us to appreciate the extent of growth prior to 2019. ... With no subscriber data prior to 2019, it is tough to appreciate what normalized subscriber growth could look like."