Rent the Runway makes Nasdaq debut, share price dips
Designer clothing rental service Rent the Runway made its initial public offering debut on Wednesday, opening nearly 10 percent above the initial public offering price, before falling.
Under the ticker symbol RENT, shares opened on the Nasdaq Global Select Market at $23, up from its IPO price of $21 each, at which point the platform had a fully diluted valuation of over $1.7 billion. The stock ended the day at $19.29.
The company’s business model revolves around renting and shopping second-hand merchandise from over 750 designer brands — one that resonates with environmentally conscious consumers.
Still, as a service-based company well-known for its event and workwear offering, Rent the Runway has felt the impact of Covid-19 on its business. Last September, it announced that it was discontinuing its unlimited swap membership in favor of a new pricing structure in an effort to improve customer loyalty and margins.
The Brooklyn, New York-based company, founded in 2009, 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.
Rent the Runway joins a growing number of businesses tapping into surging consumer demand and investor interest for new listings. The company is now among the likes of Poshmark, ThredUp, Dr Martens and The RealReal, which have all filed for an IPO since the start of the year.
Goldman Sachs & Co. LLC, Morgan Stanley & Co. LLC and Barclays Capital Inc. are acting as lead book-running managers for the proposed offering.
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