Rent the Runway Plans $243M Debt Restructuring, Growth Recapitalization

Rent the Runway has entered into a significant growth recapitalization deal aimed at strengthening its financial position by converting a large portion of its debt into common equity and raising an additional $20 million in new capital from partners APS, Story3, and Nexus. This transaction will reduce the company's outstanding debt to $120 million, extend its debt maturity to 2029, and lower interest expenses, providing enhanced financial flexibility to support growth in the expanding U.S. rental market. CEO Jennifer Hyman highlighted the company’s progress toward near cash flow breakeven in 2024 and emphasized the renewed focus on customer growth driven by a culture of customer obsession. The recapitalization, expected to close by the end of 2025, also includes a rights offering to allow existing shareholders to purchase discounted shares, fully backstopped by the new investors. Leadership from APS, Story3, and Nexus praised Rent the Runway’s differentiated strategy, asset-light inventory model, and potential as a category-defining leader in fashion rental. Despite past financial challenges, including pandemic impacts, these strategic moves aim to position Rent the Runway for sustainable growth as it continues to trade publicly under the ticker RENT on Nasdaq.