Fashion firm Rent the Runway opens in Wall St at $ 1.7 billion valuation

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Oct. 27 (Reuters) – Fashion firm Rent the Runway (RENT.O) was valued at $ 1.7 billion on Wednesday after its shares opened nearly 10% above their initial public offering price, the latest consumer-oriented company to debut in the United States.

The company’s site allows women to rent and purchase second-hand clothing and accessories such as handbags and jewelry from more than 750 designer brands.

Consumers concerned with reducing clothing and environmental waste have increased the demand for second-hand clothing and rental services, while hybrid work has eliminated the need to refresh cabinets for office users.

Strong demand for its clothing rental model helped the company reduce its net loss to $ 84.7 million in the six-month period ended July 31, from $ 88 million a year earlier.

“Women didn’t have to go back to the office to return to Rent the Runway,” co-founder and managing director Jennifer Hyman said in an interview with Reuters.

Rent the Runway CEO Jennifer Hyman, her husband Benjamin Stauffer and their children Aurora and Selene pose for photos after their IPO on the NASDAQ Stock Exchange in Times Square in the Manhattan neighborhood of New York, New York, USA , October 27, 2021. REUTERS / Carlo Allegri

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Changes to subscription plans to make them more personalized have also resulted in higher loyalty and margins, Hyman said.

Founded in 2009, Rent the Runway is backed by subsidiaries of Bain Capital Ventures and Ares Management Corp (ARES.N). Oscar-winning actress Gwyneth Paltrow sits on its board of directors and the company has also set up a panel to oversee its ESG strategy.

In recent months, amid a surge in consumer demand, several consumer-focused companies including eyewear company Warby Parker (WRBY.N) and Roger Federer-backed shoemaker On Holding AG (ONON .N) have made a solid market debut.

Shares of Brooklyn, New York-based Rent the Runway opened at $ 23, down from $ 21 each. It sold 17 million shares to raise $ 357 million in its grossed-up share sale, which was priced at the top of its initial range of $ 18 to $ 21.

Goldman Sachs & Co, Morgan Stanley and Barclays Capital are the main underwriters.

Report by Niket Nishant in Bangalore; Editing by Maju Samuel and Arun Koyyur

Our Standards: The Thomson Reuters Trust Principles.


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