Rent the Runway announces staff cuts in Q2 results

Rent the Runway plans to cut approximately 24% of its corporate employees in a new restructuring plan to reduce costs, streamline its organisational structure and drive operational efficiencies.

Expected to be completed by the end of 2022, the company estimates the restructuring plan will generate annual operating expense savings of £21-23 million ($25-$27 million) in FY23.

In addition, the restructuring plan is expected to incur total cash charges for employee severance and related costs of approximately £2.1 million ($2.5 million).

The announcement coincides with the company's financial results for the second quarter ending 31 July 2022.

For Q2 2022, Rent the Runway shared the following results:

• Revenue up 64% to £66.1 million ($76.5 million).
• Active Subscribers up 27% to 124,131.
• Total Subscribers up 37% to 173,321.
• Gross Profit up 78% to £28 million ($32.4 million).
• Net loss of £29.3 million ($33.9 million), compared to a net loss of £36.6 million ($42.4 million) in Q2 2021.
• Adjusted EBITDA of £1.5 million ($1.8 million).

Looking ahead, Rent the Runway expects full year revenue between £246 million ($285 million) to £250 million ($290 million).

Jennifer Hyman, CEO and Co-Founder of Rent the Runway, said: “We achieved two significant milestones in Q2, with both record quarterly revenue and positive Adjusted EBITDA, ahead of the timeline we had outlined, and despite an uncertain environment.

“The restructuring plan we announced today underscores our commitment to building RTR into a business that is highly profitable, has strong margins and is self-funding. These actions are intended to accelerate our path to profitability, while allowing us to continue to deliver more value to our customers and drive strong revenue growth."

Earlier this month, Rent the Runway announced that it had migrated its entire IT infrastructure and platform to Google Cloud to meet the "growing needs of its business".