The US fashion rental company Rent the Runway Inc. has given itself financial leeway by restructuring its credit terms. On Tuesday, the company announced a corresponding agreement with the creditor representative Double Helix Pte Ltd. Accordingly, the maturity date of the current loan was postponed from October 2024 to October 2026. At the same time, Rent the Runway achieved a reduction in the cash portion of future interest payments. The creditors will receive additional stock options in return.
The changes would reduce interest charges by a total of more than $20 million over the next two years, the company said in a statement. The new agreement gives Rent the Runway “significant financial flexibility” and strengthens its financial profile and “ability to drive profitable growth.”
Chief Financial Officer (CFO) Scarlett O’Sullivan described the agreement as an “important milestone” for the company. The reform of the credit conditions is “further proof of our commitment to reconcile robust growth and profitability”.
In the past quarter, the fashion rental company managed to increase its sales significantly while at the same time significantly reducing the loss through extensive savings. The agreement that has now been reached supplements the measures already implemented to reduce fixed costs, the company explained.