Rent the Runway struts onto the public market as sharing catches up to ownership

Badgley Mischka dress for the rehearsal dinner... Minus the $700 price tag. Designer clothing rental pioneer Rent the Runway made its Wall Street runway debut yesterday. Shares opened for trading 9% above their $21 IPO price, but closed the day down 8%. The 13-year-old company lets you rent chic clothes, bags, and accessories for a fraction of the sticker price. RTR handles the dry cleaning, so you don't quick-wash a $400 blouse.

• Subscription-first: Subs account for more than 80% of RTR's revenue. The "most loved" subscription plan lets you rent up to eight items a month for $135.
• "Closet in the cloud": RTR carries 700+ designers, and the average member rents $37K worth of clothes yearly. Members get special prices if they choose to buy.

"Need a gown for the gala"... But not mid-pandemic. Last year, RTR lost more than half its subscribers, and its loss widened to $171M (it's still not profitable). Even though 90% of its customers still WFH, proms and posh parties are coming back: In September, RTR subscribers rebounded to 112K — down from 134K pre-pandemic, but up 2X from September last year.

• Premium on experiences: RTR CEO Jennifer Hyman says the pandemic pushed consumers into “valuing experiences over ownership.”
• Sharing is trendy: The secondhand market is the fastest-growing portion of apparel, and RTR isn't the only one feeling the love.
• Publicly traded rivals like Poshmark, The RealReal, and ThredUp are riding the wave of sustainability trends with already-worn fashion.