[HN Gopher] Rent The Runway S-1 IPO ___________________________________________________________________ Rent The Runway S-1 IPO Author : marc__1 Score : 23 points Date : 2021-10-04 21:28 UTC (1 hours ago) (HTM) web link (www.sec.gov) (TXT) w3m dump (www.sec.gov) | raman162 wrote: | I'm not the most familiar with rent the runway but I'm curious if | this type of business alleviates or worsens the fast fashion | environmental issue. | | In theory it helps by reducing the need for people to own the | latest fashion and that could lead to a reduction in waste. But | I'm assuming that they also have to bulk purchase the latest | trends. | fasteddie wrote: | As a mediocre armchair accountant, I'm interested in how to read | their P&L since so much of the loss is depreciated clothing, | which they presumably continue to rent out even after they mark | down the value of the clothes. | | Presumably a dress has a much higher LTV in future implied | subscription income then its inherent accounting liquidation | value. | marc__1 wrote: | This is a very detailed s-1. The 'Our Financial Model' starting | on page 84 is a great way to understand how B2C companies make | money: | | > Our ROI calculation assumes an average of 20 lifetime turns per | unit. Based on the average lifetime turns as of June 2021 of all | items we acquired in fiscal years 2015, 2016 and 2017, we have | determined that an item can turn a minimum of 20 times on average | over its lifetime. | | >When we multiply the item economics from fiscal year 2019 and | the first six months of fiscal year 2021 by 20 turns, this | implies total lifetime revenue of $445 and $536, respectively, | and total lifetime profit of $212 and $324, respectively. | | >Therefore, our product ROI has improved from 4.0x to 5.9x on a | revenue basis, and from 1.9x to 3.6x on a profit basis based on | item economics in fiscal year 2019 and the first six months of | fiscal year 2021 applied over the expected lifetime of units, | respectively. We believe we have the ability to drive | improvements in product ROI over time as we continue to decrease | our fulfillment expenses to improve profitability per item and | use more efficient product acquisition channels to reduce upfront | product cost. | raman162 wrote: | I believe that this answers my original question I made in a | previous comment regarding the impact on environmental fast | fashion. Sounds like it's better for the environment for | someone to use rent the runway versus making a purchase at H&M. ___________________________________________________________________ (page generated 2021-10-04 23:00 UTC)