Fashion rental platform Rent the Runway is entering into the fast-growing resale market and is reportedly planning to float later this year in what will be the latest in a long string of fashion IPOs to take place during the pandemic.
The New York-based online business is in talks with banks in preparation for a public launch that could take place as early as this year, The Business of Fashion reports, citing people familiar with the matter.
Those talks are still in their early stages and could still lead to nothing, the sources said.
It is unclear how big a valuation the business might be seeking in the IPO, but last year it was valued at 750 million dollars - below its previous valuation of 1 billion dollars, according to Bloomberg News.
The company was hit hard by the pandemic last year as going-out events were cancelled, forcing it to announce redundancies and close its entire physical store estate.
The digitally-native retailer operated five locations across New York, Chicago, Los Angeles, San Francisco and Washington DC. It said it would return its focus to its online business and increase its number of drop-off locations across the country.
Last month, CEO and co-founder Jennifer Hyman told the New York Times that customers were returning to the company in large numbers as markets began to reopen following lockdowns.
Since a pandemic low in May 2020, there was a 92 percent increase in active subscribers, with the number of customers on track to outpace 2019 levels by the end of the year, Hyman said.
If the public offering does go ahead, it will be the latest in a spate of fashion IPOs taking place since the outbreak of the pandemic, despite the industry as a whole being hit hard during the crisis.
Those companies include resale platforms Poshmark and ThredUp, as well as iconic boot maker Dr Martens and British e-commerce giant The Hut Group.
Rent the Runway steps into resale
In another interesting development, Rent the Runway announced Wednesday plans to enter the fast-growing resale market, according to CNBC, a move that would see it competing with the likes of Poshmark, ThredUp and The RealReal.
The second-hand fashion market has boomed in recent years, driven by increasing consumer awareness over the damage the fashion industry - and particularly fast-fashion - is having on the environment.
The industry is expected to hit 64 billion dollars in the next five years and overtake the fast-fashion industry by 2029, according to a report published last year by ThredUp.