Rent the Runway, a leading luxury retailer in the U.S., has announced the resignation of its chief operating officer and president, Anushka Salinas, effective January 31. This decision comes as part of the company’s latest round of workforce layoffs, which will impact approximately 10% of its overall staff. According to a recent SEC filing, Rent the Runway stated that around 37 positions will be affected by these layoffs as part of the company’s efforts to cut costs and drive growth.
Rent the Runway outlined its strategic focus in a statement, emphasizing its commitment to strengthening critical aspects of the customer journey to fuel growth in the coming years. The company intends to invest more in marketing, consumer product development, and customer experience to capture a larger portion of the rental subscription market, which is experiencing significant growth.
The workforce restructuring is expected to be mostly completed by the end of the fourth quarter of fiscal 2023 and will incur charges of $3 million to $4 million. However, Rent the Runway estimates that these changes will result in annual cash savings of $11 million to $13 million. Despite the cost-saving measures, Salinas will remain with the company in a consulting role until February 29.
In September 2022, Rent the Runway announced a reduction of approximately 24% of its corporate employees as part of its efforts to prioritize customer experience and growth initiatives. Despite the challenges faced by the retail industry, the company has managed to narrow its earnings losses in each respective quarter over the past 18 months. The most recent financial update in December showed a decrease in net losses to $31.5 million, compared to a loss of $36.1 million in the previous quarter. However, Rent the Runway did report a 6% decline in sales for the quarter ending October 31.
To navigate these changes and position itself for the future, Jennifer Hyman, the chief executive officer and co-founder of Rent the Runway, will be taking on the additional role of president. With a renewed focus on key areas of the business, Rent the Runway aims to recapture its position in the rental subscription market and continue providing exceptional customer experiences.
Useful links:
1. Rent the Runway Official Website
2. Global Online Clothing Rental Market Growth Statistics
