The subscription economy is en vogue.
Rent The Runway’s filing with the Securities and Exchange Commission (SEC) for a public listing shows a rebound from the pandemic in terms of subscriber count and active subscribers, through revenue pressures remain in place.
The business model exists as an online platform with monthly subscriptions, with subscribers having ongoing access to the company’s “unlimited closet” or the ability to rent a la carte through the company’s Reserve offering.
Rent the Runway’s SEC filing shows that the positioning of the platform aims to capitalize on a continued shift to online channels, where once brick-and-mortar shopping reigned.
Read more: Rent The Runway Segues Into Resale Market
The company noted in its filing that as many as 80,000 retailers, or 9% of stores, will close their doors through the next five years. Direct to consumer has become an “essential channel” for every brand, said Rent the Runway.
Drilling down into the numbers, the subscriber base tallied a bit more than 95,000 in the latest fiscal year, which was down from nearly 147,900 in the previous year. The number of active subscribers declined from more than 133,570 in the fiscal year that ended in January 2020 to just under 54,800 in the January 2021 period.
But in a sign of a rebound from the depths of the pandemic, through 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 the financials: Revenues for the fiscal year that ended in January declined, from $235.4 million in 2020 to $135.9 million in the most recent year, with an operating loss that deepened slightly in 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 “closet in the cloud,” with $16 billion of GMV shipped as of July of this year.
Rent the Runway said in its filing 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 models were tied to 64% of the U.S. recorded music market, and as much as 71% of home entertainment. “We believe the apparel industry is ripe for this same disruption,” the company disclosed.
And the numbers show that people want variety in their wardrobe, as the average consumer buys more than 70 items of clothing annually, up from 40 items at the beginning of the 1990s. Online channels are a natural conduit, as U.S. online apparel sales grew at a 17% CAGR between 2015 to 2020.
With a nod to demographics, the company also noted that at the beginning of this year, women made up 47% of the U.S. workforce, and they spend three times as much as their male counterparts on workwear. Secondhand fashion, according to the firm, has “become more mainstream,” where an overwhelming majority of women (91%) have purchased or are open to buying secondhand clothing.
In its risk factors, Rent the Runway said that “many competitors or potential competitors may have longer operating histories, greater brand recognition, existing consumer and supplier relationships and significantly greater financial, marketing and other resources.” The company also stated that “additional competitors are expanding and may continue to expand into 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 larger competitors” — and those competitors might be able to attract Rent the Runway’s customer base.
The subscription economic system is en vogue.
Lease The Runway’s submitting with the Securities and Alternate Fee (SEC) for a public itemizing reveals a rebound from the pandemic by way of subscriber rely and energetic subscribers, via income pressures stay in place.
The enterprise mannequin exists as a web based platform with month-to-month subscriptions, with subscribers having ongoing entry to the corporate’s “limitless closet” or the power to hire a la carte via the corporate’s Reserve providing.
Lease the Runway’s SEC submitting reveals that the positioning of the platform goals to capitalize on a continued shift to on-line channels, the place as soon as brick-and-mortar procuring reigned.
Learn extra: Lease The Runway Segues Into Resale Market
The corporate famous in its submitting that as many as 80,000 retailers, or 9% of shops, will shut their doorways via the following 5 years. Direct to shopper has develop into an “important channel” for each model, mentioned Lease the Runway.
Drilling down into the numbers, the subscriber base tallied a bit greater than 95,000 within the newest fiscal 12 months, which was down from almost 147,900 within the earlier 12 months. The variety of energetic subscribers declined from greater than 133,570 within the fiscal 12 months that resulted in January 2020 to simply underneath 54,800 within the January 2021 interval.
However in an indication of a rebound from the depths of the pandemic, via the six-month interval that resulted in July, the corporate had greater than 126,800 complete subscribers, the place there have been greater than 97,600 energetic subscribers.
As for the financials: Revenues for the fiscal 12 months that resulted in January declined, from $235.4 million in 2020 to $135.9 million in the latest 12 months, with an working loss that deepened barely in the identical interval, from $130 million to $130.5 million.
The corporate mentioned in its submitting that it had 18,000 kinds and 750 manufacturers accessible via its “closet within the cloud,” with $16 billion of GMV shipped as of July of this 12 months.
Lease the Runway mentioned in its submitting that there was a marked shift within the economic system, the place shoppers are embracing entry slightly than possession. Final 12 months, in keeping with the agency, entry fashions had been tied to 64% of the U.S. recorded music market, and as a lot as 71% of residence leisure. “We imagine the attire trade is ripe for this identical disruption,” the corporate disclosed.
And the numbers present that individuals need selection of their wardrobe, as the typical shopper buys greater than 70 objects of clothes yearly, up from 40 objects at the start of the Nineties. On-line channels are a pure conduit, as U.S. on-line attire gross sales grew at a 17% CAGR between 2015 to 2020.
With a nod to demographics, the corporate additionally famous that at the start of this 12 months, girls made up 47% of the U.S. workforce, they usually spend 3 times as a lot as their male counterparts on workwear. Secondhand style, in keeping with the agency, has “develop into extra mainstream,” the place an amazing majority of ladies (91%) have bought or are open to purchasing secondhand clothes.
In its danger components, Lease the Runway mentioned that “many opponents or potential opponents could have longer working histories, higher model recognition, present shopper and provider relationships and considerably higher monetary, advertising and marketing and different sources.” The corporate additionally said that “further opponents are increasing and will proceed to increase into the rental and resale area during which we function, and we stay susceptible to the advertising and marketing energy and excessive degree of buyer recognition of those bigger opponents” — and people opponents would possibly have the ability to entice Lease the Runway’s buyer base.