This case examines Rent the Runway (RTR), a company that provided its customers the luxury of getting to wear the hottest designer fashions without having to pay the often exorbitant price to own the clothing. RTR built the world's largest shared designer closet, containing over 18,000 styles by more than 750 designer brands. Customers could rent individual pieces, buy products through resale offerings, or pay for a subscription guaranteeing new deliveries monthly.
RTR went public with an initial public offering (IPO) on October 26, 2021. While some investors were initially excited about the first company with an all-female board and all-female leadership team to go public, RTR's unicorn status was not enough to guarantee success. RTR had decided to go public to fuel its expansion plan as well as pay off debt, but things didn’t go smoothly after the IPO, and the company suffered from bad press related to its unexplained financial reporting.
The case, appropriate for finance, leadership communication, and general management courses, encourages students to consider communication strategies employed by firms going public and digs into several specific issues such as depreciation of assets. Though the case focuses on the struggles of the company focused on a public offering to generate capital, it also provides a variety of other discussion topics such as the purpose of an IPO, the right time for a company to go public, and how to tackle the scrutiny of investors in a newly public company. It pairs well with a technical note, "All Things IPO" (UVA-BC-0282), which unpacks the process of an IPO, including the internal and external factors companies need to weigh before taking the step.