- Fashion rental service CEO says roughly 20% of business is from shoppers seeking work clothes, a much smaller percentage than before pandemic
Rent the Runway Inc. (RENT) said it would reduce its corporate workforce by 24%, primarily through layoffs, as the fashion-rental service adjusts to a slowdown in consumer spending and shifts from shopping habits adopted earlier in the pandemic.
The New York company on Monday didn’t specify the total number of jobs affected. It had 958 full-time employees and 138 part-time employees as of Jan. 31, according to securities filings.
The workforce reduction is meant to transform Rent the Runway from a cash burner into a company that can fund itself through revenue alone, co-founder and Chief Executive Jenn Hyman said in an interview. Rent the Runway was founded in November 2008 and since its inception it has incurred roughly $878 million of losses as of July.
The announcement came as the company reported that despite revenue rising 64% in the second quarter from a year earlier, its active subscriber count unexpectedly dropped from the first quarter.
It ended the July quarter with 124,131 active subscribers, representing an increase of 27% from a year ago, but lower than the nearly 135,000 reported for the first quarter.
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