Lease the Runway Inc. is searching for a valuation of as a lot as $1.5 billion in its preliminary public providing subsequent week, in what would cap a comeback for the clothing-rental enterprise.
The New York firm is aiming to promote shares at between $18 and $21 apiece for a totally diluted valuation of $1.24 billion to $1.46 billion, it mentioned in a securities submitting Monday. The roadshow for firm administration and their underwriters to pitch the shares to potential buyers begins Tuesday and the shares are to begin buying and selling on the Nasdaq Inventory Market subsequent Wednesday.
The focused vary is above the $1 billion the corporate was valued at in early 2019, earlier than the pandemic largely eradicated the necessity for work garments and eventwear. Final 12 months, its valuation shrank to roughly $750 million, as Covid-19-related workplace and different closures prompted as a lot as two-thirds of the corporate’s subscribers to pause or cancel their memberships.
Based in 2008 by
Lease the Runway started as a “shared designer closet” from which ladies may hire single objects for particular occasions. It has since grown to supply a spread of garments from fancy to informal, and most of its income now comes from subscribers to its service that enables them to borrow a set variety of objects every month for a flat price.
Covid-19 pressured Ms. Hyman, Lease the Runway’s chief government, to cut the company’s costs by 51% and furlough or lay off half the workforce. She additionally raised new financing.
The corporate nonetheless struggled. Revenues decreased by 39% to $157.5 million in fiscal 2020. Lively subscribers shrunk to about 54,000 in the summertime of 2020 from greater than 133,000 as of Jan. 31 of that 12 months. This 12 months, nevertheless, there was a rebound, as widespread entry to Covid-19 vaccines paved the best way for social gatherings and a return to the workplace for some. In its newest IPO submitting, Lease the Runway mentioned that as of the top of September the variety of energetic subscribers had grown to roughly 112,000.
The IPO can be carefully watched, regardless of the corporate’s dimension, given its comparatively excessive profile. The brand new problem market is running at a record pace. And buyers are expecting indicators of whether or not the 12 months will finish on a robust notice and whether or not others planning listings, like Rivian Automotive Inc., will succeed.
Lease the Runway is aiming to capitalize on the rising trend of “do-gooder” companies, emphasizing how renting garments as a substitute of buying them is best for the atmosphere.
Extra IPO Protection
Extra WSJ protection of preliminary public choices, chosen by the editors.
Write to Corrie Driebusch at [email protected]
Corrections & Amplifications
Most of Lease the Runway’s income comes from subscribers to its month-to-month clothing-rental service. An earlier model of this story incorrectly mentioned most customers subscribe to the service. (Corrected on Oct. 18.)
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Appeared within the October 19, 2021, print version as ‘Lease the Runway Targets $1.5 Billion Valuation.’