The nearly 12-year-old fashion rental OG is said to be looking for bankers to arrange an initial public offering after the one-time unicorn managed to pivot through the pandemic.
Should Rent the Runway float shares later this year, it would join a litany of industry names like Poshmark, Mytheresa.com, Dr. Martens, and ThredUp, as well as self-driving tech firm TuSimple and medical scrubs startup Figs. Luxury fashion and home e-tailer 1stDibs.com, Chinese fast-fashion firm Shein and Brooks Brothers parent Authentic Brands Group are also believed to be planning their public debuts this calendar year.
The Business of Fashion reported that Rent the Runway is in talks with bankers, while Bloomberg said the company valuation could be $750 million, a notable dip after a $125 million raise in 2019 pushed the business to $1 billion status.
Though some believed Rent the Runway would have gone public years ago after nabbing $337 million in equity on top of a $200 million credit facility, the New York firm instead reexamined its business model during the tumult of 2020—and reinvested for its next chapter.
After a high-profile supply-chain meltdown in 2019 paused orders and prompted a corporate apology, Rent the Runway then launched a collaboration with Marriott’s W Hotels on the eve of 2020—only for the coronavirus pandemic to derail the travel business just months later. Like its peers across fashion and retail, Rent the Runway shuttered its store base (but converted its flagship into a service center) and laid off retail staff, though a partnership with Nordstrom has expanded the number of places where subscribers can drop off returns.
Founded by CEO Jennifer Hyman and Jennifer Fleiss, who left in 2018 to head Walmart startup Jetblack and is now a venture partner at Volition Capital, Rent the Runway last year backed away from the popular $159-a-month Unlimited membership that gave women wear-it-once, rinse-and-repeat styling options in lieu of new subscription plans.
There are signs that customers are adjusting both to the loss of the once-popular Unlimited plan and to the advent of a new normal ushering in reasons to dress up again. Hyman told the New York Times last month that Rent the Runway has seen a 92 percent increase in active subscribers, on track to outpace 2019 levels by year’s end.
Earlier this week, the company unveiled plans to play a larger role in fashion resale. The move could strengthen Rent the Runway’s value proposition for Gen Z, a cohort whose interest in secondhand and sustainability outpaces its generational counterparts.