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NEW YORK–(BUSINESS DATE)–Bragar Eagel & Squire, PC, a nationally recognized shareholder rights law firm, announces that a class action lawsuit has been filed against Rent the Runway, Inc. (“Rent the Runway” or the “Company”) (NASDAQ: RENTS. ) in the United States District Court for Eastern New York on behalf of all persons and entities that purchased or otherwise acquired Rent the Runway securities pursuant to the October 2021 IPO of the company, both dates inclusive (the “Class Period”). Investors have until January 13, 2022 to apply to the Court to be appointed as the main plaintiff in the lawsuit.
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RTR is an e-commerce platform that allows users to rent, subscribe or buy designer clothing and accessories. RTR offers premium apparel such as evening wear and accessories, as well as more casual and mixed-use items such as ready-to-wear, workwear, denim, maternity, outerwear, blouses, knitwear, loungewear, jewelry, handbags, activewear. , ski wear, home goods, and children’s clothing. RTR sources its products from over 750 luxury brand partners.
Customers can access RTR’s designer inventory in several ways. RTR gives customers ongoing access to its “unlimited locker” through its subscription offerings or the ability to rent a la carte through its “reserve offers.” Subscribers and customers also have the ability to purchase RTR products through its “resale offer.” In the first six months of 2021, subscription revenue represented 83% of RTR’s total revenue, reservation rental revenue represented 7.6% of RTR’s total revenue, and resale revenue represented 9.4% of RTR’s total revenue.
RTR’s business has been severely affected by the COVID-19 pandemic that began in March 2020. As a luxury clothing supplier, RTR’s sales and services have suffered from take-home orders and the decline in opportunities for social gatherings among its customer base. Between its fiscal years 2019 and 2020, RTR’s revenues fell nearly 40% to $157.5 million and its total active subscribers fell nearly 60% to 54,797 active subscribers.1
In the months leading up to the IPO, RTR claimed it experienced a business resurgence as worries about the COVID-19 pandemic eased, turnkey orders stopped, and its customers engaged in more social outings. For example, the Company stated that it had grown to 111,732 active subscribers as of September 30, 2021, representing 104% growth since the beginning of fiscal year 2021. Similarly, the Registration Statement stated that during the second quarter of 2021 of RTR (the quarter immediately before the IPO) quarterly revenues grew to USD 46.7 million, representing 62% growth year over year.
On October 4, 2021, the Company filed with the SEC a registration statement on Form S-1 for the IPO, which, after several amendments, was declared effective on October 26, 2021 (the “Registration Statement”). On October 27, 2021, the Company filed with the SEC a prospectus for the IPO on Form 424B4, which incorporated and formed a part of the Registration Statement (the “Prospectus”). The Registration Statement and Prospectus used to sell to the investing public 17 million shares of RTR Class A common stock at $21 per share for $357 million in gross offering proceeds, which was used in large part to repay debt of certain of the private companies of the company. stock supporters.
If you have purchased or otherwise acquired shares of Rent the Runway and suffered a loss, are a long-term shareholder, have information, would like to learn more about these claims or have questions about this announcement or your rights or interests in relation to them. matters, please contact Brandon Walker or Melissa Fortunato by email at investigations@bespc.com, by phone at (212) 355-4648, or by filling out this contact form. There is no cost or obligation to you.
About Bragar Eagel & Squire, PC:
Bragar Eagel & Squire, PC is a nationally recognized law firm with offices in New York, California, and South Carolina. The firm represents individual and institutional investors in commercial, securities, derivatives and other complex litigation in state and federal courts across the country. For more information about the company, please visit www.bespc.com. Lawyer advertising. Previous results do not guarantee similar results.
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