Rent the Runway Shares Fall After Strong Market Debut
Rent the Runway closed its first day of trading with shares below the initial IPO price.
The fashion rental platform began trading on Wednesday at $23 per share, which was above its initial IPO price of $21 per share. Shares closed at $19.29 each on Wednesday and were as low as $19.00 on Thursday morning.
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Rent the Runway sold 17 million shares on Tuesday for $21 each, raising a total of $357 million in its IPO. On Wednesday, the company began trading on The Nasdaq Global Select Market under the ticker symbol “RENT.”
Rent the Runway was founded in 2009 as a fashion rental service and recently began selling all products on its website, according to reports, in addition to offering them for rent. The company said in a July release that it “confidentially submitted a draft registration statement on Form S-1 with the Securities and Exchange Commission relating to the proposed initial public offering of its Class A common stock.”
Rent the Runway offers over 750 brands for sale or rent including formal items, workwear, casual apparel, handbags and kids wear, among other categories. The platform had a market valuation at around $750,000 last year. In March 2020, the company eliminated some positions during the pandemic. Last August, the company said it would close units in New York, Washington, D.C., Los Angeles, San Francisco and Chicago and focus on its digital operations and canceled its unlimited subscription model in September.
With the secondhand market set to more than double in size to $77 billion over the next five years, more circular fashion platforms are heading to the public markets.
Poshmark made its market debut in January and raised $277 million after selling 6.6 million shares priced at $42 apiece. ThredUp raised $168 million in its initial public offering in March and earned a valuation of roughly $1.3 billion.
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