Rent the Runway: Fashion Leader with Stock on the Rise
What is Rent the Runway?
Rent the Runway, Inc. (NASDAQ: RENT) operates shared designer closets and provides a clothing rental service in the US. Through subscription plans, rental, and resale offerings, the company offers a wide range of clothing items, including formal wear, ready-to-wear, accessories, workwear, casual attire, denim, maternity wear, loungewear, outerwear, blouses, ski wear, knitwear, jewelry, handbags, and activewear.
Jennifer Hyman and Jennifer Fleiss founded Rent the Runway, officially launching the company in November 2009. In addition to its core business, the company is involved in support and software development activities. Rent the Runway is headquartered in Brooklyn, New York, where it was originally established.
The company sells clothing in sizes varying from 00 to 22 that over 700 designers create. In addition, customers can rent clothing through the firm’s Reserve program for four or eight days without committing to a subscription.
To ensure it fits, every rental comes with a free backup size. For an extra charge, customers can obtain a second style. The cost of dry cleaning and garment care is included in the rental price.
The business started letting anyone purchase used goods from its website in 2021 without requiring a membership. Since 2016, subscribers have been able to buy rent the runway items they rented items at a time.
Because of its innovative approach to fashion rentals and resale, the company has demonstrated significant growth potential. By offering flexible, sustainable fashion choices, Rent the Runway has positioned itself as a leader in the industry.
Some of Rent the Runway’s top competitors include Hurr, The Volte, UnoMoi, Designer Wardrobe, Armarium, Charlotte’s Closet, Vow to be Chic, Klozee, GlamourRent, and 99dresses.
History of Rent the Runway
Hyman and Fleiss were Harvard Business School sectionmates in 2007. They frequently talked about business concepts, including Rent the Runway.
After witnessing her sister go overboard on an expensive new gown for a wedding, Hyman started renting out dresses for women for special occasions. Her long-term goal was to provide women with on-demand, easy accessibility to designer items.
Designer Diane von Fürstenberg was first presented with the idea by Hyman and Fleiss as a time rental service for her brand’s website. At first, she seemed uninterested and recommended that they build their multi-brand designer clothing website instead.
Venture capitalists such as Fidelity, Highland Capital Partners, Franklin Templeton, Bain Capital Ventures, TCV, American Express, and T. Rowe Capital have invested over $400 million in the company. The company faced negative press in 2015 following the departure of several key executives, including Linda Honan, who later joined BBDO, and Chief Technology Officer Camille Fournier.
By the end of 2016, the company made a strong recovery, aided by a Series E investment from Fidelity Investments and the launch of new physical retail locations. Fleiss departed the business in 2017 to co-found the concierge shopping service Jetblack. Hyman continued as CEO, and Fleiss stayed on the board.
Awards and Recognition
In 2013, 2014, 2015, 2018, and 2019, CNBC’s Disruptor 50 category featured Rent the Runway. The business earned recognition as one of Fast Company’s Most Innovative Companies in 2011, 2015, 2018, and 2019.
Time magazine named Rent the Runway one of the 50 best websites of the year in 2010. Furthermore, it was recognised as a World Changing Idea by Fast Company in 2014. The New York State Society for Human Resource Management recognised Rent the Runway as being one of the top companies to work in New York State in 2014.
Hyman was named one of Time’s 100 Most Influential in 2019. Hyman was listed on Fortune’s Trailblazers list of people transforming the face of business in 2013, and the company was named one of Forbes’ 12 Most Disruptive Names in Business in 2013.
Co-founder Fleiss and Hyman have both been in the lists of “30 Under 30” by Inc. Magazine, “40 Under 40” by Fortune and “Most Influential Women in Technology” by Fast Company.
“Rising Stars in Retail” by Fashion Group International for the 14th year, “Women Entrepreneurs to Watch” by Forbes, and “The Business Journal 2016 Upstart 100 Class of Creatives.”
Rent the Runway Stock Price
RENT stock price is at $13.26, an increase of 12.37%. The recent Rent the Runway stock forecast indicates that by August 24, 2024, the share price of Rent the Runway, Inc. will have increased by 10.60% to $14.73.
The Fear & Greed Indicator is reading 39 (Fear), and our technical indicators indicate that the sentiment is Neutral. During the previous 30 days, the price volatility of RENT stock was 19.74%, with 13 out of 30 (43%) green days.
The Rent the Runway stock prediction indicates that the current price of RENT is 9.58% below our estimate, suggesting that the stock may be cheap.
The RENT stock long-term forecast for the start of the upcoming year is $6.38. This is based on the average annual growth of the stock over the past 10 years.
Rent the Runway’s stock price prediction for the next 30 days is based on both positive and negative trends observed over the past month. According to the current trend, RENT shares should rise by 8.64% tomorrow and by 31.10% over the next seven days.
Like any other asset, supply and demand dynamics affect Rent the Runway stock price. Fundamental factors like new product launches, mergers and acquisitions, earnings announcements, and other factors can impact these dynamics.
In addition, market sentiment, economic trends, interest rates, inflation rates, and political developments can all impact the price of RENT shares.
RENT/USD 5-Day Chart
RENT Earning Forecast
The earnings estimate for RENT in the upcoming quarter is -$5.00, with a range from -$5.86 to -$4.13. The EPS for the previous quarter was -$6.03. Over the past 12 months, RENT has exceeded its EPS forecast 50% of the time.
In contrast, the industry has outperformed its EPS forecasts 60.88% of the time, indicating that RENT has underperformed compared to the broader industry over the past year.
RENT’s projected sales for the upcoming quarter range from $76.60M to $78.00M, while sales for the prior quarter totaled $75.00M. Over the last 12 months, RENT has surpassed its sales projections 50% of the time.
The industry, however, has outperformed sales forecasts 55.88% of the time, further highlighting RENT’s relative underperformance compared to its peers over the past year.
Final Thoughts
In conclusion, Rent the Runway has revolutionised the fashion industry with its innovative rental model, offering flexibility, access to diverse fashion styles, and options tailored for special events. Its unique features, such as customizable rental periods and monthly shipment options, continue to make it a significant player in the evolving fashion landscape.
For investors, considering factors such as the company’s strong partnerships with well-known brands like Free People is crucial when evaluating its growth potential. While challenges remain, Rent the Runway’s forward-thinking approach positions it as a company with considerable long-term opportunities.
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