Rental platform Rent the Runway (RTR) has unveiled a significant restructuring plan as part of its Q2 financial report which will see total reductions of approximately 24 percent of corporate employees.
Next to further plans to reorganise functions and reallocate resources, the overall strategy hopes to help the company reduce costs, streamline its organisational structure and drive operational efficiency.
In a release, RTR stated that its restructuring plan is expected to be “substantially” completed by the end of Q4 of 2022 and, while it does warn its Q3 results may be slightly impacted by employee severance and other non-cash charges, it is expecting that the strategy will generate annual operating expense savings of 25 to 27 million dollars in fiscal 2023.
“The restructuring plan we announced today underscores our commitment to building RTR into a business that is highly profitable, has strong margins and is self-funding,” said Jennifer Hyman, CEO and co-founder of the platform.
Hyman added: “These actions are intended to accelerate our path to profitability, while allowing us to continue to deliver more value to our customers and drive strong revenue growth.”
RTR revenue and subscriber numbers increase for Q2
The announcement comes alongside the company’s financial reports, in which it stated its revenue was at 76.5 million dollars, an increase year-over-year from 46.7 million dollars in Q2 of 2021.
The platform’s active subscribers saw an increase of 27 percent from 97,614 to 124,131, with its total subscribers also increasing by 37 percent to 173,321.
RTR’s gross profit was 32.4 million dollars, representing a 78 percent increase, while its gross margin was 42.4 percent, compared to its previous 39 percent. Additionally, the company’s net loss was 33.9 million dollars, down from 42.4 million dollars in 2021’s Q2.
The firm presented its adjusted EBITDA as 1.8 million dollars, compared to 1.9 million in the previous year. It stated that it is expecting its EBITDA margin to be between one to three percent in Q3 of 2022, while its revenue is expected to be in the range of 72 to 74 million dollars. For the fiscal year 2022, it has estimated that its revenue will be somewhere between 285 million to 290 million dollars.