Rent the Runway, a leading digital-first fashion rental service, is in the process of securing $25 million in its most recent funding round. This round of funding could potentially value the company at around $750 million, representing a significant decrease from its previous valuation of $1 billion. The primary investor in this funding round is T. Rowe Price, a current investor in Rent the Runway.
Despite operating five physical stores in major cities like New York, Chicago, Washington DC, San Francisco, and Santa Monica, Rent the Runway has had to close all of its locations since March 16 due to government-mandated lockdowns as a result of the ongoing Covid-19 pandemic.
As businesses across the globe continue to face economic hardships brought on by the pandemic, many startups, including Rent the Runway, are seeking additional funding from private investors to weather the storm. The company has experienced a significant decline in sales during these challenging times, leading to the implementation of cost-cutting measures and layoffs to sustain its operations.
Earlier this year, Rent the Runway received negative publicity for its handling of employee welfare during the crisis, with reports emerging of inadequate safety measures being implemented in its warehouses and sudden layoffs of retail and customer service staff without prior notice.
Sources from Business of Fashion who have chosen to remain anonymous have indicated that Rent the Runway’s plans for the current funding round are still in flux and subject to change. This uncertainty underscores the difficult business environment faced by companies in the current climate of unprecedented uncertainty.
For more information on Rent the Runway and its funding efforts, please visit their official website here. Additionally, for updates on the latest developments in the fashion industry, check out Business of Fashion’s website here.
