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Rent The Runway IPO: Fashion Rental Company Files to Go Public on Nasdaq

A Rent the Runway IPO is coming to the Nasdaq. The company’s recent filing revealed the effects of the pandemic on its finances. Here’s the latest news…
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A Rent the Runway IPO is coming to the Nasdaq. The company’s recent filing revealed the effects of the pandemic on its finances. Here’s what investors should know…

Rent the Runway: About the Sustainable Fashion Business

Jennifer Hyman and Jennifer Fleiss founded Rent the Runway in November 2009 after meeting at Harvard Business School. A friend of the duo splurged on a designer dress that sent her into credit card debt, which gave them an idea for a business in the fashion industry. The two pioneered the ‘Closet in the Cloud,’ a dream closet filled with over 18,000 styles of 750+ designer brands to rent, wear and return (or keep). Today, Jennifer Hyman serves as CEO.

Before Rent the Runway, wearing designer fashion wasn’t realistic for many people. Rent the Runway disrupted the fashion industry by democratizing high-end fashion. What began as a way for women to rent dresses for special events expanded to everyday wear through subscription services. Members can choose from different plans starting at $69 per month. Rent the Runway has served over 2.5 million lifetime customers across all of its offerings and had nearly 127,000 ending total subscribers (active and paused) as of July 31, 2021.

While fast fashion is criticized for unethical practices and environmental impact, Rent the Runway serves as a major industry disruptor. The company aims to reduce the environmental impact of the clothing industry by increasing the life and use of clothing. On the company website, Rent the Runway claims its business model has displaced the need for the production of 1.3 million new clothing items in the past decade, saving…

  • 67 million gallons of water
  • Enough electricity to power 12,657 households for a year
  • C0² emissions equivalent to 47,737 roundtrip flights between Newark, NJ and Dallas, TX

The company’s commitment to a sustainable future presents an opportunity for investors. But the impacts of COVID have been damaging to the fashion industry.

Rent the Runway Impacted by Global Pandemic

Consumers are becoming more environmentally conscious, which has led to a growing demand for second-hand clothes. However, the pandemic turned away many customers as stay-at-home mandates took effect, and people were less inclined to dress up.

Customers fled as Americans found themselves dressed up with nowhere to go. Only 30% of subscribers remained in May 2020. Rent the Runway’s future looked bleak with demand collapsing. During this time, Hyman halted advertising, closed brick-and-mortar stores, pitched for venture capital funding, laid off 15% and furloughed 30% of the staff and instituted a three-month salary cut.

Jennifer Hyman used the pause in operations as an opportunity to make tech upgrades and strategic shifts. Old membership plans were replaced with more affordable options and fulfillment centers were updated and further automated. The new plans unlocked a new segment of customers. And as mandates lift and the world goes back to normal, new subscribers are joining at the same rate as they did before the pandemic. In a Forbes report, Jennifer Hyman said…

The recovery is happening much earlier and is much steeper than we ever imagined… Nobody wants to wear anything they wore in 2020… The programs have a broader diversity of price point, and we’re attracting a higher-diversity household income into Rent the Runway. We’re seeing more diversity of customers and seeing higher loyalty of our subscribers than we were if you compare to 2019… This was one example of making a change that’s going to be strategically better for us because it could attract a broader customer base. And also financially better for us because these are higher gross margin programs.

A lower customer churn rate and higher margins are encouraging for investors. But the company’s latest funding round landed Rent the Runway at a valuation of $750 million. After being valued at $1 billion in 2019, the company has lost its unicorn status due to pandemic struggles. Let’s see how the company’s finances have been impacted…

Rent the Runway: Financial Details

Detailed financial information is in the Rent the Runway IPO prospectus, allowing you to gain more insight into the company’s finances. If you’re in the market for RENT stock, let’s look at the details.

Rent the Runway highlights some key information for investors. The company’s statement of operations and balance sheet data are summarized as follows…

Total Revenue: The company recorded a sharp drop in total revenue due to the pandemic. Rent the Runway recorded $256.9 million in total revenue for the 2019 fiscal year. In 2020, Rent the Runway reported just $157.5 million for the year – representing a 39% drop. For the six months ended July 2021, Rent the Runway has reported $80.2 million in total revenue.

Gross Profit: Rent the Runway’s gross profit is rebounding from a recent drop. The company reported $53.6 million for the fiscal 2019 year. The figure dropped to $15.5 million in the 2020 fiscal year. But for the six months ended July 2021, the company has reported $26.3 million.

Net Income (Loss): Rent the Runway’s net losses have increased in recent years. For the 2019 fiscal year, the company recorded $153.9 million in net losses. Rent the Runway’s net losses increased to over $171.1 million in the 2020 year. For the six months ended July 2021, the company’s reported net loss is $84.7 million.

Cash: Rent the Runway’s cash flow has increased. The company recorded $41.9 million in cash for fiscal 2019. In fiscal 2020, cash more than doubled to $109.2 million. The company’s cash is on track to keep increasing with $115.5 million reported for the six months ended July 2021.

Long-Term Debt: Rent the Runway’s long-term debt has skyrocketed. The company recorded $171.1 million in debt as of January 2020. By January 2021, long-term debt rose to $355.1 million – representing a year-over-year increase of over 107%. The company’s long-term debt is $381.8 million as of July 31, 2021.

The company plans to use the proceeds from the offering to fund growth and pay debt. So how much money can the Rent the Runway IPO raise? Let’s look at the filing details…

Rent the Runway IPO: RENT Stock to List on Nasdaq

Rent the Runway confidentially filed for a listing July 16. The company has not set terms for the offering yet. Check out this step-by-step guide to going public to learn more about the initial public offering process.

Rent the Runway plans to list its common stock on the Nasdaq exchange under the ticker symbol RENT. The offering is worth an estimated $100 million.

The company has not made announcements for the number of shares or price range for the offering. Check back here for the latest updates.

Goldman Sachs, Morgan Stanley and Barclays are leading the offering.

The date for a Rent the Runway IPO isn’t publicly available. But an IPO would launch the company into a hot IPO market. Discord and Stripe are among some of the recent popular companies hitting the stock exchanges sometime soon.

For other fashion-related investing opportunities, check out these fashion stocks to consider for your portfolio. You can also check out these shoe stocks to consider investing in.

As always, make sure to research before you invest. IPOs can be volatile for the first few months and share prices are constantly changing. But if IPO investing interests you, check out our top recent IPOs and our IPO calendar. We update the calendar daily to give you the latest news on upcoming and filed IPOs.

If you’re looking for the latest investment opportunities, consider signing up for Liberty Through Wealth. This free e-letter is full of market insights from leading experts. You’ll hear from bestselling author and investment expert Alexander Green. It’s one of the easiest ways to stay on top of market news out there. All you need to do is enter your email address in the box below to get started.

The post Rent The Runway IPO: Fashion Rental Company Files to Go Public on Nasdaq appeared first on Investment U.

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International

Beloved mall retailer files Chapter 7 bankruptcy, will liquidate

The struggling chain has given up the fight and will close hundreds of stores around the world.

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It has been a brutal period for several popular retailers. The fallout from the covid pandemic and a challenging economic environment have pushed numerous chains into bankruptcy with Tuesday Morning, Christmas Tree Shops, and Bed Bath & Beyond all moving from Chapter 11 to Chapter 7 bankruptcy liquidation.

In all three of those cases, the companies faced clear financial pressures that led to inventory problems and vendors demanding faster, or even upfront payment. That creates a sort of inevitability.

Related: Beloved retailer finds life after bankruptcy, new famous owner

When a retailer faces financial pressure it sets off a cycle where vendors become wary of selling them items. That leads to barren shelves and no ability for the chain to sell its way out of its financial problems. 

Once that happens bankruptcy generally becomes the only option. Sometimes that means a Chapter 11 filing which gives the company a chance to negotiate with its creditors. In some cases, deals can be worked out where vendors extend longer terms or even forgive some debts, and banks offer an extension of loan terms.

In other cases, new funding can be secured which assuages vendor concerns or the company might be taken over by its vendors. Sometimes, as was the case with David's Bridal, a new owner steps in, adds new money, and makes deals with creditors in order to give the company a new lease on life.

It's rare that a retailer moves directly into Chapter 7 bankruptcy and decides to liquidate without trying to find a new source of funding.

Mall traffic has varied depending upon the type of mall.

Image source: Getty Images

The Body Shop has bad news for customers  

The Body Shop has been in a very public fight for survival. Fears began when the company closed half of its locations in the United Kingdom. That was followed by a bankruptcy-style filing in Canada and an abrupt closure of its U.S. stores on March 4.

"The Canadian subsidiary of the global beauty and cosmetics brand announced it has started restructuring proceedings by filing a Notice of Intention (NOI) to Make a Proposal pursuant to the Bankruptcy and Insolvency Act (Canada). In the same release, the company said that, as of March 1, 2024, The Body Shop US Limited has ceased operations," Chain Store Age reported.

A message on the company's U.S. website shared a simple message that does not appear to be the entire story.

"We're currently undergoing planned maintenance, but don't worry we're due to be back online soon."

That same message is still on the company's website, but a new filing makes it clear that the site is not down for maintenance, it's down for good.

The Body Shop files for Chapter 7 bankruptcy

While the future appeared bleak for The Body Shop, fans of the brand held out hope that a savior would step in. That's not going to be the case. 

The Body Shop filed for Chapter 7 bankruptcy in the United States.

"The US arm of the ethical cosmetics group has ceased trading at its 50 outlets. On Saturday (March 9), it filed for Chapter 7 insolvency, under which assets are sold off to clear debts, putting about 400 jobs at risk including those in a distribution center that still holds millions of dollars worth of stock," The Guardian reported.

After its closure in the United States, the survival of the brand remains very much in doubt. About half of the chain's stores in the United Kingdom remain open along with its Australian stores. 

The future of those stores remains very much in doubt and the chain has shared that it needs new funding in order for them to continue operating.

The Body Shop did not respond to a request for comment from TheStreet.   

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Government

Are Voters Recoiling Against Disorder?

Are Voters Recoiling Against Disorder?

Authored by Michael Barone via The Epoch Times (emphasis ours),

The headlines coming out of the Super…

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Are Voters Recoiling Against Disorder?

Authored by Michael Barone via The Epoch Times (emphasis ours),

The headlines coming out of the Super Tuesday primaries have got it right. Barring cataclysmic changes, Donald Trump and Joe Biden will be the Republican and Democratic nominees for president in 2024.

(Left) President Joe Biden delivers remarks on canceling student debt at Culver City Julian Dixon Library in Culver City, Calif., on Feb. 21, 2024. (Right) Republican presidential candidate and former U.S. President Donald Trump stands on stage during a campaign event at Big League Dreams Las Vegas in Las Vegas, Nev., on Jan. 27, 2024. (Mario Tama/Getty Images; David Becker/Getty Images)

With Nikki Haley’s withdrawal, there will be no more significantly contested primaries or caucuses—the earliest both parties’ races have been over since something like the current primary-dominated system was put in place in 1972.

The primary results have spotlighted some of both nominees’ weaknesses.

Donald Trump lost high-income, high-educated constituencies, including the entire metro area—aka the Swamp. Many but by no means all Haley votes there were cast by Biden Democrats. Mr. Trump can’t afford to lose too many of the others in target states like Pennsylvania and Michigan.

Majorities and large minorities of voters in overwhelmingly Latino counties in Texas’s Rio Grande Valley and some in Houston voted against Joe Biden, and even more against Senate nominee Rep. Colin Allred (D-Texas).

Returns from Hispanic precincts in New Hampshire and Massachusetts show the same thing. Mr. Biden can’t afford to lose too many Latino votes in target states like Arizona and Georgia.

When Mr. Trump rode down that escalator in 2015, commentators assumed he’d repel Latinos. Instead, Latino voters nationally, and especially the closest eyewitnesses of Biden’s open-border policy, have been trending heavily Republican.

High-income liberal Democrats may sport lawn signs proclaiming, “In this house, we believe ... no human is illegal.” The logical consequence of that belief is an open border. But modest-income folks in border counties know that flows of illegal immigrants result in disorder, disease, and crime.

There is plenty of impatience with increased disorder in election returns below the presidential level. Consider Los Angeles County, America’s largest county, with nearly 10 million people, more people than 40 of the 50 states. It voted 71 percent for Mr. Biden in 2020.

Current returns show county District Attorney George Gascon winning only 21 percent of the vote in the nonpartisan primary. He’ll apparently face Republican Nathan Hochman, a critic of his liberal policies, in November.

Gascon, elected after the May 2020 death of counterfeit-passing suspect George Floyd in Minneapolis, is one of many county prosecutors supported by billionaire George Soros. His policies include not charging juveniles as adults, not seeking higher penalties for gang membership or use of firearms, and bringing fewer misdemeanor cases.

The predictable result has been increased car thefts, burglaries, and personal robberies. Some 120 assistant district attorneys have left the office, and there’s a backlog of 10,000 unprosecuted cases.

More than a dozen other Soros-backed and similarly liberal prosecutors have faced strong opposition or have left office.

St. Louis prosecutor Kim Gardner resigned last May amid lawsuits seeking her removal, Milwaukee’s John Chisholm retired in January, and Baltimore’s Marilyn Mosby was defeated in July 2022 and convicted of perjury in September 2023. Last November, Loudoun County, Virginia, voters (62 percent Biden) ousted liberal Buta Biberaj, who declined to prosecute a transgender student for assault, and in June 2022 voters in San Francisco (85 percent Biden) recalled famed radical Chesa Boudin.

Similarly, this Tuesday, voters in San Francisco passed ballot measures strengthening police powers and requiring treatment of drug-addicted welfare recipients.

In retrospect, it appears the Floyd video, appearing after three months of COVID-19 confinement, sparked a frenzied, even crazed reaction, especially among the highly educated and articulate. One fatal incident was seen as proof that America’s “systemic racism” was worse than ever and that police forces should be defunded and perhaps abolished.

2020 was “the year America went crazy,” I wrote in January 2021, a year in which police funding was actually cut by Democrats in New York, Los Angeles, San Francisco, Seattle, and Denver. A year in which young New York Times (NYT) staffers claimed they were endangered by the publication of Sen. Tom Cotton’s (R-Ark.) opinion article advocating calling in military forces if necessary to stop rioting, as had been done in Detroit in 1967 and Los Angeles in 1992. A craven NYT publisher even fired the editorial page editor for running the article.

Evidence of visible and tangible discontent with increasing violence and its consequences—barren and locked shelves in Manhattan chain drugstores, skyrocketing carjackings in Washington, D.C.—is as unmistakable in polls and election results as it is in daily life in large metropolitan areas. Maybe 2024 will turn out to be the year even liberal America stopped acting crazy.

Chaos and disorder work against incumbents, as they did in 1968 when Democrats saw their party’s popular vote fall from 61 percent to 43 percent.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times or ZeroHedge.

Tyler Durden Sat, 03/09/2024 - 23:20

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Government

Veterans Affairs Kept COVID-19 Vaccine Mandate In Place Without Evidence

Veterans Affairs Kept COVID-19 Vaccine Mandate In Place Without Evidence

Authored by Zachary Stieber via The Epoch Times (emphasis ours),

The…

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Veterans Affairs Kept COVID-19 Vaccine Mandate In Place Without Evidence

Authored by Zachary Stieber via The Epoch Times (emphasis ours),

The U.S. Department of Veterans Affairs (VA) reviewed no data when deciding in 2023 to keep its COVID-19 vaccine mandate in place.

Doses of a COVID-19 vaccine in Washington in a file image. (Jacquelyn Martin/Pool/AFP via Getty Images)

VA Secretary Denis McDonough said on May 1, 2023, that the end of many other federal mandates “will not impact current policies at the Department of Veterans Affairs.”

He said the mandate was remaining for VA health care personnel “to ensure the safety of veterans and our colleagues.”

Mr. McDonough did not cite any studies or other data. A VA spokesperson declined to provide any data that was reviewed when deciding not to rescind the mandate. The Epoch Times submitted a Freedom of Information Act for “all documents outlining which data was relied upon when establishing the mandate when deciding to keep the mandate in place.”

The agency searched for such data and did not find any.

The VA does not even attempt to justify its policies with science, because it can’t,” Leslie Manookian, president and founder of the Health Freedom Defense Fund, told The Epoch Times.

“The VA just trusts that the process and cost of challenging its unfounded policies is so onerous, most people are dissuaded from even trying,” she added.

The VA’s mandate remains in place to this day.

The VA’s website claims that vaccines “help protect you from getting severe illness” and “offer good protection against most COVID-19 variants,” pointing in part to observational data from the U.S. Centers for Disease Control and Prevention (CDC) that estimate the vaccines provide poor protection against symptomatic infection and transient shielding against hospitalization.

There have also been increasing concerns among outside scientists about confirmed side effects like heart inflammation—the VA hid a safety signal it detected for the inflammation—and possible side effects such as tinnitus, which shift the benefit-risk calculus.

President Joe Biden imposed a slate of COVID-19 vaccine mandates in 2021. The VA was the first federal agency to implement a mandate.

President Biden rescinded the mandates in May 2023, citing a drop in COVID-19 cases and hospitalizations. His administration maintains the choice to require vaccines was the right one and saved lives.

“Our administration’s vaccination requirements helped ensure the safety of workers in critical workforces including those in the healthcare and education sectors, protecting themselves and the populations they serve, and strengthening their ability to provide services without disruptions to operations,” the White House said.

Some experts said requiring vaccination meant many younger people were forced to get a vaccine despite the risks potentially outweighing the benefits, leaving fewer doses for older adults.

By mandating the vaccines to younger people and those with natural immunity from having had COVID, older people in the U.S. and other countries did not have access to them, and many people might have died because of that,” Martin Kulldorff, a professor of medicine on leave from Harvard Medical School, told The Epoch Times previously.

The VA was one of just a handful of agencies to keep its mandate in place following the removal of many federal mandates.

“At this time, the vaccine requirement will remain in effect for VA health care personnel, including VA psychologists, pharmacists, social workers, nursing assistants, physical therapists, respiratory therapists, peer specialists, medical support assistants, engineers, housekeepers, and other clinical, administrative, and infrastructure support employees,” Mr. McDonough wrote to VA employees at the time.

This also includes VA volunteers and contractors. Effectively, this means that any Veterans Health Administration (VHA) employee, volunteer, or contractor who works in VHA facilities, visits VHA facilities, or provides direct care to those we serve will still be subject to the vaccine requirement at this time,” he said. “We continue to monitor and discuss this requirement, and we will provide more information about the vaccination requirements for VA health care employees soon. As always, we will process requests for vaccination exceptions in accordance with applicable laws, regulations, and policies.”

The version of the shots cleared in the fall of 2022, and available through the fall of 2023, did not have any clinical trial data supporting them.

A new version was approved in the fall of 2023 because there were indications that the shots not only offered temporary protection but also that the level of protection was lower than what was observed during earlier stages of the pandemic.

Ms. Manookian, whose group has challenged several of the federal mandates, said that the mandate “illustrates the dangers of the administrative state and how these federal agencies have become a law unto themselves.”

Tyler Durden Sat, 03/09/2024 - 22:10

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