Rent The Runway: Polished Clothing, Sloppy Financials
As the clothing rental company prepares to go public, its S-1 filing reveals a brand that’s high on style but short on substance
WTF Is Depreciation?
Nothing gets my heart racing like the phrase “the most ridiculous thing I’ve seen since WeWork,” so my palms got sweaty when I saw this Tweet:
All assets have limited lifespans. Trucks can only drive for so many miles. Computers and IT hardware become obsolete. When’s the last time you used a fax machine? Sweaters get holes in the elbows. Depreciation is how businesses account for the decrease in an asset’s value over time.
Rent The Runway’s (RTR) business model is buying a piece of apparel for $X and then renting it out as many times as possible, hopefully generating revenue multiples of $X. The company considers the clothing it rents out to be long-term productive assets. But styles change, mustard stains, and clothing doesn’t last forever. Like a truck or a factory…
