It's a tired cliche: a woman standing in front of a closet crammed full of clothes, all of which she apparently liked well enough to purchase at some point, complaining that she has absolutely nothing to wear.
Alas, that's the reality for many. An item you loved five or 10 years ago may still be in excellent condition. It might even fit just fine. But are any of us the same person we were five or 10 years ago?
There's also been a gradual shift toward minimalism and sustainability. In 2010, Marie Kondo asked a question many took to heart: Does it bring you joy? It became clear that for many of us, even neatly put away clothes have become clutter.
Rent the Runway is meeting a lot of women where they are in life right now. And the idea is that by allowing them to rent rather than simply buy designer clothes, the company will be able to continue doing so indefinitely. Let's check out Rent the Runway's upcoming initial public offering (IPO), discuss the appeal, and look at what its success could mean for real estate.
It hasn't been all sunshine and rainbows
Everyone loves a good comeback story, and that's exactly what Rent the Runway is trying to write for itself right now. When the company announced in August 2020 that it would be closing all five of its brick-and-mortar stores permanently, it may have looked like a step toward becoming another pandemic casualty. The declining interest in fashion was devastating for a company that had just hit unicorn status in 2019 -- meaning it was a privately held start-up valued at over $1 billion.
What a difference a year or so makes. According to its securities filing, the company seeks to sell shares at between $18 and $21 apiece for a fully diluted valuation of $1.24 billion to $1.46 billion when it goes public next week.
Part of the company's success lies in the ways it has pivoted to keep pace with the rapidly changing consumer landscape. For one thing, it's expanded its offering of more casual designer clothing. And while you can still rent a single piece, Rent the Runway's subscription services are now its most popular option. The company even offers purchase options for those pieces you just don't want to let go.
Sharing is fun, practical -- and great news for real estate
For many women, the thought of sharing clothes might bring back memories of going through a friend or roommate's closet in high school or college while getting ready to go out. It was an opportunity to try out a whole new style, not just in a dressing room but out in the real world, and see how it felt.
And speaking of the real world, there would be no way for a company like Rent the Runway to succeed right now if people weren't getting back out there living their lives. The fact that the company is doing well enough to make this move is fantastic news for real estate investors. It means people are going to parties, weddings, offices, the theater, nice restaurants and bars -- all places where they want to look their best.
And of course, if people are going all those places again, that's also good news for other types of real estate less likely to involve carefully curated outfits, like nonessential retailers, casual restaurants, and gyms.
The Millionacres bottom line
People have spent a great deal of time working from home in sweats and yoga pants, going out mainly for necessities and takeout. The fact that Rent the Runway is ready to go public now is a huge deal and could even mark a turning point for real estate.
So, let the fashion show begin. Real estate investors will be watching.