Rent the Runway sees subscribers bounce back
The subscription economy is in vogue.
Rent The Runway’s filing with the Securities and Exchange Commission (SEC) for public listing shows a rebound in the pandemic in terms of number of subscribers and active subscribers, as revenue pressures remain in place.
The business model exists in the form of an online platform with monthly subscriptions, with subscribers having permanent access to the company’s “unlimited closet” or the possibility of renting à la carte through the Reserve offer of the company. ‘business.
Rent the Runway’s SEC brief shows that the platform’s positioning aims to capitalize on a continued shift to online channels, where physical purchases once ruled.
Read more: Rent The Runway Segues on the resale market
The company said in its filing that up to 80,000 retailers, or 9% of stores, will close in the next five years. Direct to consumer has become an “essential channel” for every brand, Rent the Runway said.
Looking at the numbers, the subscriber base was just over 95,000 last fiscal year, up from nearly 147,900 the year before. The number of active subscribers fell from over 133,570 during the fiscal year ended January 2020 to just under 54,800 during the period of January 2021.
But in a sign of a rebound from the depths of the pandemic, in the six-month period that ended in July, the company had more than 126,800 total subscribers, where there were more than 97,600 active subscribers.
As for financials: Revenue for the fiscal year ended January declined from $ 235.4 million in 2020 to $ 135.9 million in the most recent year, with an operating loss which increased slightly over the same period, from $ 130 million to $ 130.5 million.
The company said in its filing that it had 18,000 styles and 750 brands available through its “cloud closet,” with $ 16 billion of GMV shipped in July this year.
Rent the Runway said in its file that there has been a marked shift in the economy, where consumers are embracing access rather than ownership. Last year, according to the firm, access patterns were linked to 64% of the U.S. recorded music market and up to 71% of home entertainment. “We believe the apparel industry is ripe for this same disruption,” the company revealed.
And the numbers show that people want variety in their wardrobes, as the average consumer buys more than 70 clothes a year, up from 40 in the early 1990s. Online channels are a natural conduit, as sales of Clothing online in the United States grew at a CAGR of 17% between 2015 and 2020.
With a nod to demographics, the company also noted that at the start of this year, women made up 47% of the US workforce and spent three times as much as their male counterparts on clothing. of work. Second-hand fashion, according to the company, has “become more mainstream,” where an overwhelming majority of women (91%) have bought or are willing to buy second-hand clothes.
In its risk factors, Rent the Runway stated that “many competitors or potential competitors may have longer operating histories, greater brand recognition, existing consumer and supplier relationships, and financial resources. , marketing and other much more important “. The company also said that “additional competitors are developing and may continue to develop in the rental and resale space in which we operate, and we remain vulnerable to the marketing power and high level of customer recognition of these more competitors. important ”- and these competitors may be able to attract Rent the Runway customers.