Dive Brief:

• Fashion rental specialist Rent the Runway has confidentially filed papers for an initial public offering with the Securities and Exchange Commission, the company said Monday in a press release.
• The company has not yet determined the number of shares or price for the IPO.
• Rent the Runway didn't set a date for the IPO but said it would take place after the SEC completes its review.  

Dive Insight:

A hungry stock market has driven a spate of retail IPOs in recent months. So far this year, Retail Dive has tracked five major IPO filings in the industry, not including Warby Parker's public listing. And those came after 2020's two-decade high in IPOs across industries. In the class of 2020 IPOs were Casper, Poshmark and Petco.  

The IPOs provide those companies with liquidity, the chance to pay down any debt, and of course give early investors an exit. (In some cases, such as Joann's IPO, some big investors have held on to their majority stakes, effectively controlling the company after going public.) 

IPOs also give the industry and the public at large a window into some of the industry's disruptors. With many of the newly minted public companies playing in the e-commerce field, an IPO often reveals the losses online players have accrued while trying to build their customer base.

That doesn't mean investors shun their stock. Indeed, losses are often viewed as the cost of doing business early on as an e-commerce company. Stockholders essentially make a bet that scale, growth, new lines of business and other future developments will put the company in the black someday. 

Rent the Runway's confidential filing means investors and the industry will have to wait a little longer to peer into the company's books, but they will eventually. Bloomberg has reported that the company struggled early in the pandemic, wiping out a quarter of its previous valuation of $1 billion. Last March, the company closed its brick-and-mortar stores to focus on its drop-box locations. 

The fashion rental player certainly isn't alone in its pandemic struggles. In shutting down offices and gatherings, the COVID-19 crisis was deeply felt across the apparel sector. Stitch Fix, ThredUp, the RealReal and Farfetch were among the online apparel specialists that racked up operating losses in 2020, and traditional fashion retailers by and large suffered as well. 

Since the fall, Rent the Runway has made tweaks to its offer, including dropping its unlimited rental subscription and opening up its resale option beyond subscribers.