Rent the Runway hurried out of the gate on its market debut on Wednesday, but the designer apparel rental company’s share price has steadily declined from then on.
The company’s IPO raised $ 357 million in shares sold at $ 21 per share, and began trading on NASDAQ under the symbol RENT, up nearly 10% at $ 23 per share. The share price rose to a high of $ 24.77 in the morning but then gradually fell to close at $ 19.29.
|RENT||RENT THE RUNWAY INC COM USD 0.001 CLASS A||17.25||-1.60||-8.49%|
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However, Rent the Runway’s $ 1.2 billion valuation at the closing bell shows that the company struggled back after suffering a major blow from the pandemic last year when its valuation at one point rose to 750 million US dollar had fallen. The company hit the $ 1 billion mark for the first time in early 2019.
Rent the Runway was launched in 2008 by co-founders Jenny Fleiss and Jennifer Hyman, who serves as CEO. The company initially rented designer clothes for special occasions and gradually expanded the range to include more casual items.
When COVID-19 hit, the company’s customers or would-be customers stayed home as the events were canceled. That also meant that business took a hit.
According to The Wall Street Journal, Rent the Runway saw revenue drop nearly 40% in fiscal 2020 to $ 157.5 million, and subscribers dropped from 133,000 in January to around 54,000 by the summer of last year.
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Now Rent the Runway is making a comeback, even though the vast majority of its clients have not returned to the office yet.
“Ninety percent of our customers continue to work from home, and we’re back to almost 100% of the job [subscribers] were in late 2019, “Hyman told the Journal.” So when women return to an office even if it’s only a day or two a week when they return to a party or wedding, that’s just a business benefit . “