Cover
Cover - shares | 3 Months Ended | |
Apr. 30, 2023 | Jun. 02, 2023 | |
Entity Listings [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Apr. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-40958 | |
Entity Registrant Name | RENT THE RUNWAY, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 80-0376379 | |
Entity Address, Address Line One | 10 Jay Street | |
Entity Address, City or Town | Brooklyn | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 11201 | |
City Area Code | (212) | |
Local Phone Number | 524-6860 | |
Title of 12(b) Security | Class A common stock, par value $0.001 per share | |
Trading Symbol | RENT | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0001468327 | |
Current Fiscal Year End Date | --01-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Filer Category | Accelerated Filer | |
Common Class A | ||
Entity Listings [Line Items] | ||
Entity Common Stock, Shares Outstanding | 64,236,581 | |
Common Class B | ||
Entity Listings [Line Items] | ||
Entity Common Stock, Shares Outstanding | 3,085,148 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Apr. 30, 2023 | Jan. 31, 2023 |
Current assets: | ||
Cash and cash equivalents | $ 141.4 | $ 154.5 |
Restricted cash, current | 4.2 | 3.1 |
Prepaid expenses and other current assets | 12.9 | 14.5 |
Total current assets | 158.5 | 172.1 |
Restricted cash | 5.8 | 6 |
Rental product, net | 87.8 | 78.7 |
Fixed assets, net | 41.8 | 44.7 |
Intangible assets, net | 3.9 | 4.1 |
Operating lease right-of-use assets | 26 | 26.7 |
Other assets | 3.6 | 3.9 |
Total assets | 327.4 | 336.2 |
Current liabilities: | ||
Accounts payable | 18.8 | 12.4 |
Accrued expenses and other current liabilities | 21.8 | 24.4 |
Deferred revenue | 13.6 | 12 |
Customer credit liabilities | 6.5 | 6.8 |
Operating lease liabilities | 4.5 | 4.4 |
Total current liabilities | 65.2 | 60 |
Long-term debt, net | 281.2 | 272.5 |
Operating lease liabilities | 37.1 | 38.3 |
Other liabilities | 0.5 | 0.7 |
Total liabilities | 384 | 371.5 |
Commitments and Contingencies (Note 13) | ||
Stockholders’ equity (deficit) | ||
Preferred stock, $0.001 par value; 10,000,000 shares authorized as of April 30, 2023 and January 31, 2023; 0 shares issued and outstanding as of April 30, 2023 and January 31, 2023 | 0 | 0 |
Additional paid-in capital | 913.3 | 904.5 |
Accumulated deficit | (970) | (939.9) |
Total stockholders’ equity (deficit) | (56.6) | (35.3) |
Total liabilities and stockholders’ equity (deficit) | 327.4 | 336.2 |
Common Class A | ||
Stockholders’ equity (deficit) | ||
Common stock, value, issued | 0.1 | 0.1 |
Common Class B | ||
Stockholders’ equity (deficit) | ||
Common stock, value, issued | $ 0 | $ 0 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Apr. 30, 2023 | Jan. 31, 2023 |
Preferred stock, par value (usd per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common Class A | ||
Common stock, par value (usd per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 300,000,000 | 300,000,000 |
Common stock, shares, issued (in shares) | 63,602,721 | 61,956,536 |
Common stock, shares, outstanding (in shares) | 63,602,721 | 61,956,536 |
Common Class B | ||
Common stock, par value (usd per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 50,000,000 | 50,000,000 |
Common stock, shares, issued (in shares) | 3,078,421 | 3,066,251 |
Common stock, shares, outstanding (in shares) | 3,078,421 | 3,066,251 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Millions | 3 Months Ended | |
Apr. 30, 2023 | Apr. 30, 2022 | |
Revenue: | ||
Subscription and Reserve rental revenue | $ 66.8 | $ 61.4 |
Other revenue | 7.4 | 5.7 |
Total revenue, net | 74.2 | 67.1 |
Costs and expenses: | ||
Fulfillment | 21.9 | 22.9 |
Technology | 13.1 | 13.6 |
Marketing | 9.3 | 8.7 |
General and administrative | 26.5 | 29.2 |
Rental product depreciation and revenue share | 20.9 | 21.7 |
Other depreciation and amortization | 3.8 | 4.2 |
Total costs and expenses | 95.5 | 100.3 |
Operating loss | (21.3) | (33.2) |
Interest income / (expense), net | (8.8) | (9.3) |
Net loss before income tax benefit / (expense) | (30.1) | (42.5) |
Income tax benefit / (expense) | 0 | 0 |
Net loss | $ (30.1) | $ (42.5) |
Net loss per share attributable to common stockholders, basic (usd per share) | $ (0.46) | $ (0.67) |
Net loss per share attributable to common stockholders, diluted (usd per share) | $ (0.46) | $ (0.67) |
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic (in shares) | 65,865,906 | 63,431,165 |
Weighted-average shares used in computing net loss per share attributable to common stockholders, diluted (in shares) | 65,865,906 | 63,431,165 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes in Stockholders’ Equity (Deficit) - USD ($) $ in Millions | Total | Common Stock | Additional Paid-in Capital | Accumulated Deficit |
Beginning balance (in shares) at Jan. 31, 2022 | 63,036,797 | |||
Beginning balance at Jan. 31, 2022 | $ 71.1 | $ 0.1 | $ 872.2 | $ (801.2) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Stock issued under stock incentive plan (in shares) | 894,105 | |||
Stock issued under stock incentive plan | 0 | |||
Share-based compensation expense | 5.5 | 5.5 | ||
Net loss | (42.5) | (42.5) | ||
Ending balance (in shares) at Apr. 30, 2022 | 63,930,902 | |||
Ending balance at Apr. 30, 2022 | 34.1 | $ 0.1 | 877.7 | (843.7) |
Beginning balance (in shares) at Jan. 31, 2023 | 65,022,787 | |||
Beginning balance at Jan. 31, 2023 | (35.3) | $ 0.1 | 904.5 | (939.9) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Stock issued under stock incentive plan (in shares) | 1,658,355 | |||
Stock issued under stock incentive plan | 0 | |||
Share-based compensation expense | 8.8 | 8.8 | ||
Net loss | (30.1) | (30.1) | ||
Ending balance (in shares) at Apr. 30, 2023 | 66,681,142 | |||
Ending balance at Apr. 30, 2023 | $ (56.6) | $ 0.1 | $ 913.3 | $ (970) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 3 Months Ended | |
Apr. 30, 2023 | Apr. 30, 2022 | |
OPERATING ACTIVITIES | ||
Net loss | $ (30.1) | $ (42.5) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||
Rental product depreciation and write-offs | 9.6 | 12.3 |
Write-off of rental product sold | 2.5 | 1.3 |
Other depreciation and amortization | 3.8 | 4.2 |
(Gain) / loss from lease termination and write-off of fixed and intangible assets | 0.1 | 1.9 |
Proceeds from rental product sold | (5.4) | (4) |
(Gain) / loss from liquidation of rental product | (0.2) | 0 |
Accrual of paid-in-kind interest | 7.1 | 3.4 |
Amortization of debt discount | 1.6 | 1 |
Share-based compensation expense | 8.8 | 5.5 |
Changes in operating assets and liabilities: | ||
Prepaid expenses and other current assets | 1.6 | 0.9 |
Operating lease right-of-use assets | 0.7 | 2.5 |
Other assets | 0.3 | 0.3 |
Accounts payable, accrued expenses and other current liabilities | (3.7) | (1.8) |
Deferred revenue and customer credit liabilities | 1.3 | 3 |
Operating lease liabilities | (1.1) | (5.5) |
Other liabilities | (0.2) | 0.1 |
Net cash (used in) provided by operating activities | (3.3) | (17.4) |
INVESTING ACTIVITIES | ||
Purchases of rental product | (14.6) | (13.4) |
Proceeds from liquidation of rental product | 1.3 | 0.6 |
Proceeds from sale of rental product | 5.4 | 4 |
Purchases of fixed and intangible assets | (0.9) | (2) |
Net cash (used in) provided by investing activities | (8.8) | (10.8) |
FINANCING ACTIVITIES | ||
Other financing payments | (0.1) | (1.6) |
Net cash (used in) provided by financing activities | (0.1) | (1.6) |
Net (decrease) increase in cash and cash equivalents and restricted cash | (12.2) | (29.8) |
Cash and cash equivalents and restricted cash at beginning of period | 163.6 | 259.6 |
Cash and cash equivalents and restricted cash at end of period | 151.4 | 229.8 |
Reconciliation of Cash and Cash Equivalents and Restricted Cash to the Condensed Consolidated Balance Sheets: | ||
Cash and cash equivalents | 141.4 | 219 |
Restricted cash, current | 4.2 | 5 |
Restricted cash, noncurrent | 5.8 | 5.8 |
Total cash and cash equivalents and restricted cash | 151.4 | 229.8 |
Cash payments (receipts) for: | ||
Fixed operating lease payments (reimbursements), net | 2.8 | 3.7 |
Fixed assets and intangibles received in the prior period | 0.1 | 0.8 |
Rental product received in the prior period | 5.4 | 6.5 |
Non-cash financing and investing activities: | ||
Financing lease right-of-use asset amortization | 0.2 | 0.1 |
ROU assets obtained in exchange for lease liabilities | 0 | 0.1 |
Purchases of fixed assets and intangibles not yet settled | 0 | 1.5 |
Purchases of rental product not yet settled | $ 13 | $ 12.7 |
Business
Business | 3 Months Ended |
Apr. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business | Business Description of Business Rent the Runway, Inc.’s (the “Company”) mission is to power women to feel their best every day. Launched in November 2009, the Company has built the world’s first and largest shared designer closet with thousands of styles by hundreds of brand partners. The Company gives customers access to its “unlimited closet” through its subscription offering (“Subscription”) or the ability to rent a-la-carte through its reserve offering (“Reserve”). The Company’s corporate headquarters is located in Brooklyn, New York and the operational facilities are located in Secaucus, New Jersey, and Arlington, Texas. Its wholly-owned subsidiary, Rent the Runway Limited, is located in Galway, Ireland, and is focused on software development and support activities. All revenue is currently generated in the United States. Substantially all revenue is derived from rental subscription fees and a-la-carte rental fees, with a portion derived from the sale of apparel and accessories and other fees. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Apr. 30, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiary. All intercompany accounts and transactions have been eliminated in consolidation. The Company’s condensed consolidated financial statements were prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”). Certain amounts in the financial statements have been reclassified to conform to the current presentation. The unaudited interim condensed consolidated financial statements and related disclosures have been prepared by management on a basis consistent with the annual consolidated financial statements and, in the opinion of management, include all adjustments necessary for a fair statement of the results for the interim periods presented. The results for the three months ended April 30, 2023 are not necessarily indicative of the operating results expected for the year ending January 31, 2024 or any future period. Certain information and notes normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted under the Securities and Exchange Commission’s (the “SEC”) rules and regulations. Accordingly, the unaudited condensed consolidated financial statements and notes included herein should be read in conjunction with the Company’s audited consolidated financial statements and notes for the year ended January 31, 2023, which can be found in the Company’s Annual Report on Form 10-K filed with the SEC on April 13, 2023. Fiscal Year The Company operates on a fiscal calendar ending January 31. All references to fiscal year 2022 reflect the results of the 12-month period ended January 31, 2023. All references to fiscal year 2023 reflect the results of the 12-month period ending January 31, 2024. Segment Information Operating segments are defined as components of an entity for which discrete financial information is available that is regularly reviewed by the chief operating decision maker (“CODM”) in deciding how to allocate resources and in assessing performance. The Company’s Chief Executive Officer is the Company’s CODM. The Company has one operating and reportable segment as the CODM reviews financial information on a consolidated basis for purposes of making operating decisions, allocating resources, and evaluating financial performance. All revenue is attributed to customers based in the United States and substantially all the Company’s long-lived assets are located in the United States. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. The Company bases its estimates on historical experience, market conditions, and on various other assumptions that are believed to be reasonable. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include the useful life and salvage value of rental product, incremental borrowing rate to determine lease liabilities, and the valuation of share-based compensation and warrants. As of April 30, 2023, the effects of the macroeconomic environment on the Company’s business, results of operations, and financial condition continue to evolve. As a result, many of the Company’s estimates and assumptions required increased judgment and carry a higher degree of variability and volatility. As additional information becomes available, the Company’s estimates may change materially in future periods. Concentrations of Credit Risks Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents. The Company places its cash investments with high credit quality financial institutions. The Company believes no significant credit risk exists with respect to these financial instruments. No single customer accounted for more than 5% of the Company’s revenue during the three months ended April 30, 2023 and 2022. Fair Value Measurements and Financial Instruments Fair value accounting is applied for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the condensed consolidated financial statements on a recurring basis, at least annually. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities recorded at fair value in the condensed consolidated financial statements are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Hierarchical levels, which are directly related to the amount of subjectivity, associated with the inputs to the valuation of these assets or liabilities, are as follows: Level 1: Observable inputs, such as quoted prices in active markets for identical assets and liabilities. Level 2: Inputs other than the quoted prices in active markets that are observable either directly or indirectly. Level 3: Unobservable inputs, in which there is little or no market data which require the Company to develop its own assumptions. Observable inputs are based on market data obtained from independent sources. Unobservable inputs reflect the Company’s assessment of the assumptions market participants would use to value certain financial instruments. This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. The categorization of financial instruments within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consist primarily of accounts receivable, net, interest receivable, prepaid insurance, prepaid technology expenses and prepaid taxes. Accounts receivable, net consists primarily of amounts due from third party liquidation and Exclusive Design wholesale partners that do not bear interest. The Company records an allowance for doubtful accounts taking into consideration historical losses adjusted for current market conditions, the financial condition of the customer, the amount of receivables in dispute, and the current receivables aging and payment patterns. Accounts receivable, net was $4.1 million and $4.0 million as of April 30, 2023 and January 31, 2023, respectively. The allowance for doubtful accounts was immaterial as of April 30, 2023 and January 31, 2023. As of April 30, 2023 and January 31, 2023, one third party partner represented the majority of the Company’s accounts receivable balance. Rental Product, Net The Company considers rental product to be a long-term productive asset and, as such, classifies it as a noncurrent asset on the condensed consolidated balance sheets. Rental product is stated at cost, less accumulated depreciation. The Company depreciates rental product, less an estimated salvage value, over the estimated useful lives of the assets using the straight-line method. The useful life is determined based on historical trends and an assessment of any future changes. The salvage value considers the historical trends and projected liquidation proceeds for the assets. The estimated useful lives and salvage values are described below: Useful Life Salvage Value Apparel 3 years 20 % Accessories 2 years 30 % In accordance with its policy, the Company reviews the estimated useful lives and salvage values of rental product on an ongoing basis. The Company offers its customers an opportunity to purchase items prior to the end of their useful life. In such instances, the Company considers the disposal of rental product to be a sale and, as such, records the proceeds as other revenue and the net book value of the items at the time of sale as rental product depreciation in the condensed consolidated statements of operations within rental product depreciation and revenue share. Write-offs for losses on lost, damaged, and unreturned apparel and accessories are also recorded within rental product depreciation and revenue share. Once it is no longer considered rentable, rental product in a sellable condition is classified as held for sale and written down to salvage value. The value of rental product held for sale as of April 30, 2023 and January 31, 2023 was $3.0 million and $3.0 million, respectively. The accelerated depreciation related to rental product held for sale was $0.9 million and $1.4 million for the three months ended April 30, 2023 and 2022 , respectively. The accelerated depreciation is presented on the condensed consolidated statements of operations within rental product depreciation and revenue share. When rental product is liquidated, the Company records the gain or loss calculated as proceeds, net of the remaining salvage value and costs to sell, within general and administrative expenses on the condensed consolidated statement of operations. The gain or loss from the liquidation of rental product is included as an adjustment to reconcile net loss to net cash used by operating activities in the condensed consolidated statements of cash flows. The purchases of rental product, as well as the proceeds from the sale and liquidation of rental product, are classified as cash flows from investing activities on the condensed consolidated statements of cash flows because the predominant activity of the rental product purchased is to generate rental revenue and such classification is consistent with the classification of long-term asset activity. Proceeds from the sale of rental product were $5.4 million and $4.0 million for the three months ended April 30, 2023 and 2022, respectively. Revenue Recognition Subscription and a-la-carte rental fees (“Subscription and Reserve rental revenue”) are recognized in accordance with Accounting Standard Update (“ASU”) 2016-02 , Leases, Topic 842 (“ASC 842”). Other revenue, primarily related to the sale of rental product, is recognized under ASU 2014-09, Revenue from Contracts with Customers, Topic 606 (“ASC 606”) at the date of delivery of the product to the customer. Other revenue represented 10% and 8% of total revenue for the three months ended April 30, 2023 and 2022 , respectively. Revenue is presented net of promotional discounts, customer credits and refunds. Promotional discounts are recognized in accordance with either ASC 842 or ASC 606, based on the guidance applied to the rental fees or product sales to which the promotional discounts are related. Revenue is presented net of taxes that are collected from customers and remitted to governmental authorities. The Company recognizes a liability at the time a customer credit or a gift card is issued, and revenue is recognized upon redemption of the credit or gift card. The Company’s customer credit liability is presented on the condensed consolidated balance sheets. During the three months ended April 30, 2023, $0.7 million of credits included in the customer credit liability as of January 31, 2023 were redeemed. Customer credits and gift cards do not have expiration dates. Over time, a portion of these instruments is not redeemed. The Company recognizes breakage income related to these instruments based on the redemption pattern method. The Company continues to maintain the full liability for the unredeemed portion of the credits and gift cards when the Company has any legal obligation to remit such credits to government authorities in relevant jurisdictions. Subscription and Reserve Rental Revenue Subscription fees are recognized ratably over the subscription period, commencing on the date the subscriber enrolls in the rental program. The fees are collected upon enrollment. The subscription automatically renews on a monthly basis until cancelled or paused by the customer. Subscribers can pause or cancel their subscriptions at any time. The Company recognizes fees for a-la-carte rentals ratably over the rental period, which starts with the date of delivery of rental product to the customer. A-la-carte rental orders can be placed up to four months prior to the rental start date and the customer’s payment form is charged upon order confirmation. The Company defers recognizing the fees and any related promotions for a-la-carte rentals until the date of delivery, and then recognizes those fees ratably over the four eight The Company accrues for credits and refunds issued subsequent to the balance sheet date that relate to rentals prior to the balance sheet date. These amounts were not material as of April 30, 2023 and January 31, 2023. Other Revenue Other revenue consists primarily of revenue from the sale of rental product. The Company recognizes revenue from the sale of rental product in accordance with ASC 606. Sale of rental product occurs when a customer purchases rental product at a discounted price, calculated as a percentage of retail value. Payment is due upon order confirmation and there is no financing component. The single performance obligation associated with rental product sales is generally satisfied upon delivery of the rental product to the customer. The Company does not have any material contractual assets or liabilities with respect to other revenue as of April 30, 2023 and January 31, 2023. From time to time, Other revenue may include revenue generated from pilots and other growth initiatives which may cause quarterly fluctuations in the Other revenue line. Share-Based Compensation The Company recognizes all employee share-based compensation as an expense in the condensed consolidated financial statements. Equity classified awards are measured at the grant date fair value of the award. The Company estimates grant date fair value of stock options using the Black-Scholes option pricing model. The fair value of stock options is recognized as compensation expense on a straight-line basis over the requisite service period of the award. Determining the fair value of options at the grant date requires judgment, including the expected term that stock options will be outstanding prior to exercise, the associated volatility, and the expected dividend yield. The fair value of common stock is based on the closing price of the common stock on the date of grant as reported on the Nasdaq Stock Market. Upon grant of awards, the Company also estimates an amount of forfeitures that will occur prior to vesting. The Company has granted two types of restricted stock units (“RSUs”). Prior to the effectiveness of the Company’s initial public offering (“IPO”), the Company granted RSUs which vest only upon satisfaction of both time-based service and liquidity-based conditions. The Company records share-based compensation expense for such RSUs on an accelerated attribution method over the requisite service period and only once the liquidity-based condition is satisfied. The liquidity-based vesting condition was satisfied upon the effectiveness of the Company’s IPO . Share-based compensation related to any remaining time-based service for these RSUs after the liquidity-based event is recorded over the remaining requisite service period. Post IPO, the Company has granted RSUs which vest upon satisfaction of a single time-based service condition. The Company records share-based compensation expense for these RSUs on a straight-line basis over the requisite service period. See Note 11 - Share-based Compensation Plans for a description of the accounting for share-based awards. Recently Issued and Adopted Accounting Pronouncements Recently Adopted Accounting Pronouncements Financial Instruments – Credit Losses In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , which requires an entity to utilize a new impairment model known as the current expected credit loss (“CECL”) model to estimate its lifetime “expected credit loss” and record an allowance that, when deducted from the amortized cost basis of the financial asset, presents the net amount expected to be collected on the financial asset. The CECL model is expected to result in more timely recognition of credit losses. This guidance also requires new disclosures for financial assets measured at amortized cost, loans, and available-for-sale debt securities. This standard is effective for annual reporting periods beginning after December 15, 2022, and interim periods within those years, and early adoption is permitted. The Company adopted this standard on February 1, 2023, and the adoption of this standard did not have a material impact on the condensed consolidated financial statements. Recently Issued Accounting Pronouncements Debt - Debt with Conversion and Other Options and Derivatives and Hedging In August 2020, the FASB issued ASU 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. The new guidance reduces complexity and improves comparability of financial reporting associated with accounting for convertible instruments and contracts in an entity’s own equity. This standard is effective for annual reporting periods beginning after December 15, 2023, and interim periods within those years, and early adoption is permitted. The adoption of this standard is not expected to have a material impact on the condensed consolidated financial statements. |
Liquidity
Liquidity | 3 Months Ended |
Apr. 30, 2023 | |
Liquidity [Abstract] | |
Liquidity | Liquidity The Company has incurred a net loss from operations since inception and has historically relied upon debt and equity financing to fund its operations. The Company experienced year-over-year revenue and subscriber growth in fiscal year 2022 and in the three months ended April 30, 2023. However, the Company believes that macroeconomic factors, including sensitivity to increased pricing, impacted active subscriber levels in fiscal year 2022. The Company believes that these factors did not have a material impact during the first quarter of fiscal year 2023. In September 2022, the Company announced a restructuring plan that is expected to generate annual operating expense savings of approximately $25 million (relative to the second quarter of fiscal year 2022 run rate) in fiscal year 2023. Actual savings may differ from these estimates. While the Company experienced revenue growth in fiscal year 2022 and the three months ended April 30, 2023, to the extent that the Company is further impacted by macroeconomic trends, the Company has established plans to preserve existing cash liquidity, which includes additional reductions to labor, operating expenses, and/or capital expenditures. As of April 30, 2023 and January 31, 2023, the Company held cash and cash equivalents of $141.4 million and $154.5 million, respectively. The Company believes that it will have sufficient liquidity from cash on-hand and future operations to sustain its business operations, to satisfy its debt service obligations and to comply with its debt covenants for at least the next twelve months from the date these financial statements are issued. Refer to Note 6 - Long-Term Debt for details of the amendment to refinance the Temasek debt facility in January 2023. |
Leases - Lessee Accounting
Leases - Lessee Accounting | 3 Months Ended |
Apr. 30, 2023 | |
Leases [Abstract] | |
Leases - Lessee Accounting | Leases - Lessee Accounting During the three months ended April 30, 2022 , the Company amended the operating lease for its corporate headquarters in Brooklyn, NY, the terms of which terminated one floor of the leased space . The partial lease termination of the corporate headquarters leased space resulted in a reduction of $10.6 million in the Company’s future minimum fixed lease obligations as of the lease modification date. The Company treated the partial lease termination amendment as a lease modification as of the effective date which resulted in an adjustment of $3.7 million and $1.4 million to the related lease liabilities and right-of-use assets, respectively. The Company recorded a gain on the partial termination of $1.8 million and a loss on surrender of the related fixed assets, primarily leasehold improvements, of $1.9 million, both of which are recorded on the condensed consolidated statements of operations within general and administrative expenses. The following table summarizes the Company’s minimum fixed lease obligations under existing agreements as a lessee, excluding variable payments and short-term lease payments, as of April 30, 2023: Operating Financing Fiscal year: 2023 $ 8.1 $ 0.5 2024 9.5 0.5 2025 8.2 0.2 2026 8.1 — 2027 7.9 — Thereafter 34.7 — Total minimum lease payments 76.5 1.2 Imputed interest (34.9) (0.2) Lease liabilities as of April 30, 2023 $ 41.6 $ 1.0 |
Leases - Lessee Accounting | Leases - Lessee Accounting During the three months ended April 30, 2022 , the Company amended the operating lease for its corporate headquarters in Brooklyn, NY, the terms of which terminated one floor of the leased space . The partial lease termination of the corporate headquarters leased space resulted in a reduction of $10.6 million in the Company’s future minimum fixed lease obligations as of the lease modification date. The Company treated the partial lease termination amendment as a lease modification as of the effective date which resulted in an adjustment of $3.7 million and $1.4 million to the related lease liabilities and right-of-use assets, respectively. The Company recorded a gain on the partial termination of $1.8 million and a loss on surrender of the related fixed assets, primarily leasehold improvements, of $1.9 million, both of which are recorded on the condensed consolidated statements of operations within general and administrative expenses. The following table summarizes the Company’s minimum fixed lease obligations under existing agreements as a lessee, excluding variable payments and short-term lease payments, as of April 30, 2023: Operating Financing Fiscal year: 2023 $ 8.1 $ 0.5 2024 9.5 0.5 2025 8.2 0.2 2026 8.1 — 2027 7.9 — Thereafter 34.7 — Total minimum lease payments 76.5 1.2 Imputed interest (34.9) (0.2) Lease liabilities as of April 30, 2023 $ 41.6 $ 1.0 |
Rental Product, Net
Rental Product, Net | 3 Months Ended |
Apr. 30, 2023 | |
Rental Product [Abstract] | |
Rental Product, Net | Rental Product, Net Rental product, net consisted of the following: April 30, January 31, 2023 2023 Apparel $ 162.9 $ 156.7 Accessories 5.7 5.9 168.6 162.6 Less: accumulated depreciation (80.8) (83.9) Rental product, net $ 87.8 $ 78.7 Depreciation and write-offs related to rental product, including write-offs of rental products sold, was $12.1 million and $13.6 million for the three months ended April 30, 2023 and 2022, respectively. |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Apr. 30, 2023 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt Summary The following table summarizes the Company’s line of credit and long-term debt outstanding as of April 30, 2023 and January 31, 2023: April 30, January 31, 2023 2023 Temasek Facility principal outstanding $ 271.6 $ 271.6 Add: payment-in-kind interest 25.0 17.8 Less: unamortized debt discount (15.4) (16.9) Temasek Facility, net 281.2 272.5 Less: current portion of long-term debt — — Total noncurrent line of credit and long-term debt $ 281.2 $ 272.5 Temasek Facility In July 2018, the Company entered into a subordinated, junior lien term loan agreement with Double Helix Pte Ltd. as administrative agent for Temasek Holdings (the “Temasek Facility”). The Company drew $100.0 million under the Temasek Facility at closing with the ability to draw an additional $100.0 million in multiple drawings at any time prior to July 23, 2020 (the “Initial Temasek Commitments”) based on meeting certain performance and financial tests at each draw. In November 2019, the Company drew an additional $50.0 million of the Initial Temasek Commitments and amended the Temasek Facility to include an additional $30.0 million of committed availability (the “Subsequent Temasek Commitments”). In March 2020, the Company drew the remaining $50.0 million of the Initial Temasek Commitments and the $30.0 million of the Subsequent Temasek Commitments. The Initial Temasek Commitments had an interest rate of 15% per annum that accrued as noncash interest. The Subsequent Temasek Commitments had a cash interest rate of 13% per annum, payable quarterly. The Temasek Facility required mandatory prepayment upon certain defined triggering events as well as optional prepayments, but such mandatory prepayments were not required to be made while the Company’s senior secured term loan with Ares Corporate Opportunities Fund V, L.P. was outstanding. In October 2021, the Company used proceeds from the IPO to pay down the Subsequent Temasek Commitments of $30.0 million outstanding principal and interest in full. Concurrently, the Company entered into an amendment to the Temasek Facility (the “2021 Temasek Facility Amendment”). The Temasek Facility as amended by the 2021 Temasek Facility Amendment is referred to as the “2021 Amended Temasek Facility”. This transaction was accounted for as a debt modification. The terms of the 2021 Temasek Facility Amendment provide for, among other things, (i) an extension of the maturity to October 2024, (ii) an outstanding principal under the 2021 Amended Temasek Facility of $271.6 million (with no additional debt proceeds having been funded and after giving effect to the repayment described below), and (iii) an amended interest rate of 12% with up to 5% payable in kind. On the effective date of the 2021 Temasek Facility Amendment, the Company paid down an additional $30.0 million of the outstanding principal of the 2021 Amended Temasek Facility, for a total of $60.0 million principal paydown on the Temasek Facility and 2021 Amended Temasek Facility. The effective interest rate for the Temasek Facility for the period from the date of issuance through the date of the 2021 Temasek Facility Amendment was 15.95%. The debt discount associated with the Initial Temasek Commitments was fully accreted when the Company entered into the 2021 Temasek Facility Amendment. In October 2021, in connection with the 2021 Amended Temasek Facility, the Company recorded a debt discount of $15.3 million, of which $0.2 million related to lender fees, $5.3 million related to the allocation of proceeds to warrants issued in relation to the 2021 Amended Temasek Facility, $1.0 million related to the extension of the term of warrants issued in relation to the Temasek Facility, and $8.8 million related to fees incurred to amend the 2021 Amended Temasek Facility . These amounts are being accreted to the principal amount of the 2021 Amended Temasek Facility through the recognition of noncash interest expense. In January 2023, the Company entered into an amendment to the 2021 Amended Temasek Facility (“2022 Temasek Facility Amendment”). The 2021 Amended Temasek Facility as further amended by the 2022 Temasek Facility Amendment is referred to as the “2022 Amended Temasek Facility”. This transaction was accounted for as a debt modification. The terms of the amendment provide for, (i) an extension of the maturity to October 2026, (ii) a reduction of the cash portion of the interest rate to 2% per year through July 2024, increasing to 5% thereafter for the duration of the 2022 Amended Temasek Facility, and (iii) a 1% increase in the total interest rate in February 2024 from 12% to 13% and annual rate increases of 1% thereafter for the duration of the 2022 Amended Temasek Facility. In connection with the 2022 Temasek Facility Amendment, the Company granted a warrant to purchase up to 2 million shares of the Company’s Class A common stock at an exercise price of $5.00 per share. The warrant will expire on January 31, 2030. The effective interest rate for the 2021 Amended Temasek Facility for the period from the date of issuance through the date of the 2022 Amended Temasek Facility was 14.29%. The effective interest rate for the 2022 Amended Temasek Facility as of January 31, 2023 was 15.15%. In January 2023, in connection with the 2022 Amended Temasek Facility, the Company recorded a debt discount of $6.9 million related to the allocation of proceeds to warrants issued. These amounts are being accreted to the principal amount of the 2022 Amended Temasek Facility through the recognition of noncash interest expense. The 2022 Amended Temasek Facility did not change the covenants under the 2021 Amended Temasek Facility, which require the Company to comply with specified nonfinancial covenants including, but not limited to, restrictions on the incurrence of debt, payment of dividends, making of investments, sale of assets, mergers and acquisitions, modifications of certain agreements and its fiscal year, and granting of liens. Additionally, the 2022 Amended Temasek Facility includes a minimum liquidity maintenance covenant of $50.0 million. The 2022 Amended Temasek Facility also contains various events of default, the occurrence of which c ould result in the acceleration of obligations for the Company. The Company determined that all of the embedded features of the Temasek Facility, 2021 Amended Temasek Facility, and 2022 Amended Temasek Facility were clearly and closely related to the debt host and did not require bifurcation as a derivative liability, or the fair value of the feature was immaterial to the Company’s condensed consolidated financial statements. Covenants The Company was in compliance with all applicable financial and nonfinancial covenants as of April 30, 2023. |
Income Taxes
Income Taxes | 3 Months Ended |
Apr. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company’s provision or benefit from income taxes in interim periods is determined using an estimate of the annual effective tax rate, adjusted for discrete items, if any, that are taken into account in the relevant period. Each quarter the Company updates its estimate of the annual effective tax rate, and if its estimated tax rate changes, the Company makes a cumulative adjustment. The estimate of the annual effective income tax rate for the full year is applied to the respective interim period, taking into account year-to-date amounts and projected results for the full year. The Company continues to maintain a full valuation allowance on all United States net deferred tax assets for all periods presented. The amount of unrecognized tax benefits as of April 30, 2023 and January 31, 2023 was $0.9 million and $0.9 million, respectively. The Company recognizes interest and penalties related to unrecognized tax benefits in income tax expense. The total amount of unrecognized benefits relating to the Company’s tax position is subject to change based on future events including, but not limited to, the settlements of ongoing audits and/or the expiration of applicable statutes of limitations. The outcomes and timing of such events are highly uncertain and a reasonable estimate of the range of gross unrecognized tax benefits, excluding interest and penalties, that could potentially be reduced during the next 12 months cannot be made at this time . |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 3 Months Ended |
Apr. 30, 2023 | |
Payables and Accruals [Abstract] | |
Accrued Expenses and Other Current Liabilities | Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consisted of the following: April 30, January 31, 2023 2023 Accrued operating and general expenses $ 9.1 $ 6.0 Revenue share payable 5.9 5.3 Accrued payroll related expenses 2.5 4.7 Sales and other taxes 2.4 2.7 Accrued interest 1.4 5.1 Gift card liability 0.5 0.6 Accrued expenses and other current liabilities $ 21.8 $ 24.4 |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Apr. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements As of April 30, 2023 and January 31, 2023, the carrying amounts of the Company’s cash and cash equivalents, current and noncurrent restricted cash, prepaid expenses and other current assets, accounts payable and accrued expenses and other current liabilities approximated their estimated fair value due to their relatively short maturities. The Company’s long-term debt is reported at carrying value o n the Company’s condensed consolidated balance sheet. Refer to Note 6 — Long-Term Debt. The Company estimates the fair value of its long-term debt based on recently reported market transactions for similar financial instruments by companies with similar credit ratings and, as such, are classified as Level 2 within the fair value hierarchy. As of April 30, 2023, the estimated fair value of the Company’s long-term debt was $276.7 million. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Apr. 30, 2023 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Common Stock Holders of Class A common stock are entitled to one vote per share and holders of Class B common stock are entitled to twenty votes per share, as well as dividends if and when declared by the Board of Directors and, upon liquidation, dissolution, winding up or other liquidation event of the Company, all assets available for distribution to common stockholders. There are no redemption provisions with respect to common stock. Preferred Stock Upon the IPO, the Company authorized 10,000,000 shares of preferred stock, with a par value of $0.001 per share. No shares were issued or outstanding as of April 30, 2023. Warrants As of April 30, 2023 and January 31, 2023, the Company had the following outstanding warrants: April 30, 2023 Outstanding Warrants Date Number of Class of Exercise Fair Value Equity classified: TriplePoint Nov-16 82,891 Common $ 7.54 $ 0.3 TriplePoint Jun-17 18,236 Common 7.54 0.1 TriplePoint Sep-17 14,920 Common 7.54 0.1 TriplePoint Jan-18 16,578 Common 7.54 0.1 TriplePoint Apr-18 16,578 Common 7.54 0.1 TriplePoint Nov-15 35,215 Common 17.04 0.2 TriplePoint Jun-16 28,172 Common 17.04 0.2 TriplePoint Sep-16 24,650 Common 17.04 0.1 Double Helix (Temasek) Oct-21 394,343 Common 21.00 5.3 Double Helix (Temasek) Jan-23 2,000,000 Common 5.00 6.9 2,631,583 $ 13.4 The warrant for 730,000 shares of common stock issued to Double Helix (Temasek) in July 2018 with an exercise price of $27.40 per share expired unexercised during the three months ended April 30, 2022. See Note 6 - Long-Term Debt for details of the warrants issued to Temasek in January 2023. January 31, 2023 Outstanding Warrants Date Number of Class of Exercise Fair Value Equity classified: TriplePoint Nov-16 82,891 Common $ 7.54 $ 0.3 TriplePoint Jun-17 18,236 Common 7.54 0.1 TriplePoint Sep-17 14,920 Common 7.54 0.1 TriplePoint Jan-18 16,578 Common 7.54 0.1 TriplePoint Apr-18 16,578 Common 7.54 0.1 TriplePoint Nov-15 35,215 Common 17.04 0.2 TriplePoint Jun-16 28,172 Common 17.04 0.2 TriplePoint Sep-16 24,650 Common 17.04 0.1 Double Helix (Temasek) Oct-21 394,343 Common 21.00 5.3 Double Helix (Temasek) Jan-23 2,000,000 Common 5.00 6.9 2,631,583 $ 13.4 As of April 30, 2023 and January 31, 2023, all outstanding warrants were equity-classified and recorded as additional paid-in capital. Equity-classified contracts are not subsequently remeasured unless reclassification is required from equity to liability classification. The fair value was estimated using the Black-Scholes option pricing model. The fair value is subjective and is affected by changes in inputs to the valuation model including the fair value per share of the underlying stock, the expected term of each warrant, volatility of the Company’s stock and peer company stock, and risk-free rates based on the U.S. Treasury yield curves. |
Share-based Compensation Plans
Share-based Compensation Plans | 3 Months Ended |
Apr. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Share-based Compensation Plans | Share-based Compensation Plans 2009 Stock Incentive Plan and 2019 Stock Incentive Plan In 2009, the Company adopted its stock incentive plan (the “2009 Plan”) to grant equity to employees and service providers. In 2019, the Company adopted a new stock incentive plan (the “2019 Plan”) which replaced the 2009 Plan. The Company has granted RSUs and stock options, each of which is settleable in shares. Options are generally granted for a 10-year term, and generally vest and become fully exercisable over four years of service. RSU awards have both service-based and liquidity-based vesting conditions. The liquidity-based vesting condition was satisfied in connection with the effectiveness of the Company’s IPO. The service-based requirement of RSUs was typically satisfied ove r four years. While no shares are available for future issuance under the 2009 Plan or the 2019 Plan, they continue to govern outstanding equity awards granted thereunder. Outstanding awards granted under the 2009 Plan and 2019 Plan are exercisable for or settled in shares of Class A common stock, or, if approved by the board of directors, shares of Class B common stock. Amended and Restated 2021 Incentive Award Plan The Company's Amended and Restated 2021 Incentive Award Plan (the "2021 Plan") was adopted by its board of directors and approved by stockholders in October 2021 and became effective upon the effective date of the IPO. The 2021 Plan replaced the 2019 Plan, and no further grants will be made under the 2019 Plan. The terms of equity awards granted under the 2021 Plan in the year ended January 31, 2022 were generally consistent with those granted under the 2019 Plan, as described above. RSUs granted under the 2021 Plan in the year ended January 31, 2022 generally vest over four years and do not have liquidity-based vesting conditions. RSUs granted under the 2021 Plan during the year ended January 31, 2023 and three months ended April 30, 2023 have a shorter vesting period of one 1,997,050 shares of Class A common stock available for issuance under the 2021 Plan. There will not be any further equity grants of Class B common stock. The grant date fair value of each option award is estimated on the date of grant using the Black-Scholes option pricing model. The option pricing model considers several variables and assumptions in estimating the fair value of share-based awards. Because the Company’s shares are only recently publicly traded and there is a lack of historical company-specific data available, expected term is estimated under the simplified method using the vesting and contractual terms, and expected volatility is estimated based on the average historical volatility of similar entities with publicly traded shares. The risk-free rate for the expected term of the option is based on the U.S. Treasury yield curve at the date of grant. Stock Options Stock option activity during the period indicated is as follows: Number of Weighted Weighted Aggregate Balances as of January 31, 2023 8,060,647 $ 7.33 6.37 $ 0.4 Granted — — Exercised — — Forfeited (83,256) 7.92 Balances as of April 30, 2023 7,977,391 $ 7.32 6.14 $ — Exercisable as of April 30, 2023 6,078,894 $ 7.17 5.63 $ — As of April 30, 2023, there was $7.1 million of unrecognized compensation cost related to stock options granted that is expected to be recognized o ver a weighted average period of 2.0 years. The Company currently uses authorized and unissued shares to satisfy the exercise of stock option awards. RSUs RSUs activity during the period indicated is as follows: Number of Weighted Unvested and outstanding as of January 31, 2023 5,976,121 $ 5.64 Granted 5,390,172 2.99 Vested/Released (1,658,355) 5.59 Forfeited (79,014) 4.29 Unvested and outstanding as of April 30, 2023 9,628,924 $ 4.18 As of April 30, 2023, there wa s $23.2 million of unrecognized compensation cost related to RSUs granted that is expected to be recognized over a weighted average period of 1.8 years. Share-Based Compensation Summary The classification of share-based compensation for the three months ended April 30, 2023 and 2022, respectively, presented within each line item of the condensed consolidated statements of operations is as follows: Three Months Ended April 30, 2023 2022 Technology $ 1.9 $ 1.2 Marketing 0.1 0.2 General and administrative 6.8 4.1 Total share-based compensation $ 8.8 $ 5.5 The Company recognized $1.9 million of incremental share-based compensation expense in General and administrative expenses during the three months ended April 30, 2023 due to equity award modifications related to the transition of the Chief Financial Officer role. |
Net Loss per Share Attributable
Net Loss per Share Attributable to Common Stockholders | 3 Months Ended |
Apr. 30, 2023 | |
Earnings Per Share [Abstract] | |
Net Loss per Share Attributable to Common Stockholders | Net Loss per Share Attributable to Common StockholdersThe Company computes net loss per share attributable to common stockholders under the two-class method required for multiple classes of common stock and participating securities. The rights of the Class A common stock and Class B common stock are substantially identical, other than voting rights. Accordingly, the net loss per share attributable to common stockholders will be the same for Class A and Class B common stock on an individual or combined basis. The following table sets forth the computation of basic and diluted net loss per share attributable to common stockholders: Three Months Ended April 30, 2023 2022 Numerator: Net loss attributable to common stockholders $ (30.1) $ (42.5) Denominator: Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted 65,865,906 63,431,165 Net loss per share attributable to common stockholders, basic and diluted $ (0.46) $ (0.67) The following potentially dilutive outstanding securities based on amounts outstanding at each period end were excluded from the computation of diluted loss per share attributable to common stockholders because including them would have been anti-dilutive: Three Months Ended April 30, 2023 2022 Stock options 7,977,391 9,180,984 Common stock warrants 2,631,583 631,583 RSUs 9,628,924 5,836,908 Total 20,237,898 15,649,475 |
Commitment and Contingencies
Commitment and Contingencies | 3 Months Ended |
Apr. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies The Company had restricted cas h balances for cash collateralized standby letters of credit as of April 30, 2023 and January 31, 2023 of $10.0 million and $9.1 million, respectively, primarily to satisfy security deposit requirements on its leases. Legal Proceedings From time to time in the normal course of business, various claims and litigation have been asserted or commenced against the Company. Due to uncertainties inherent in litigation and other claims, the Company can give no assurance that it will prevail in any such matters, which could subject the Company to significant liability for damages. Any claims or litigation could have an adverse effect on the Company’s results of operations, cash flows, or business and financial condition in the period the claims or litigation are resolved. Accruals for loss contingencies are recorded when a loss is probable, and the amount of such loss can be reasonably estimated. On November 14, 2022, a purported stockholder of the Company filed a putative class action lawsuit in the Eastern District of New York against the Company, certain of its officers and directors, and the underwriters of its IPO, entitled Rajat Sharma v. Rent the Runway, Inc., et al. 22-cv-6935. The complaint alleges that the defendants violated Sections 11 and 15 of the Securities Act of 1933, as amended, by making allegedly materially misleading statements, and by omitting material facts necessary to make the statements made therein not misleading concerning, inter alia , the Company’s growth at the time of the IPO. The lawsuit seeks, among other things, compensatory damages, an award of attorneys’ fees and costs and such other relief as deemed just and proper by the court. On June 8, 2023, the court appointed Delaware Public Employees’ Retirement System and Denver Employees Retirement Plan as lead plaintiff. The Company intends to vigorously defend against these claims. The Company believes it has meritorious defenses to the claims of the plaintiff and members of the class and any liability for the alleged claims is not currently probable and the potential loss or range of loss is not reasonably estimable. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Apr. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiary. All intercompany accounts and transactions have been eliminated in consolidation. The Company’s condensed consolidated financial statements were prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”). Certain amounts in the financial statements have been reclassified to conform to the current presentation. The unaudited interim condensed consolidated financial statements and related disclosures have been prepared by management on a basis consistent with the annual consolidated financial statements and, in the opinion of management, include all adjustments necessary for a fair statement of the results for the interim periods presented. The results for the three months ended April 30, 2023 are not necessarily indicative of the operating results expected for the year ending January 31, 2024 or any future period. Certain information and notes normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted under the Securities and Exchange Commission’s (the “SEC”) rules and regulations. Accordingly, the unaudited condensed consolidated financial statements and notes included herein should be read in conjunction with the Company’s audited consolidated financial statements and notes for the year ended January 31, 2023, which can be found in the Company’s Annual Report on Form 10-K filed with the SEC on April 13, 2023. |
Fiscal Year | Fiscal YearThe Company operates on a fiscal calendar ending January 31. All references to fiscal year 2022 reflect the results of the 12-month period ended January 31, 2023. All references to fiscal year 2023 reflect the results of the 12-month period ending January 31, 2024. |
Segment Information | Segment Information Operating segments are defined as components of an entity for which discrete financial information is available that is regularly reviewed by the chief operating decision maker (“CODM”) in deciding how to allocate resources and in assessing performance. The Company’s Chief Executive Officer is the Company’s CODM. The Company has one operating and reportable segment as the CODM reviews financial information on a consolidated basis for purposes of making operating decisions, allocating resources, and evaluating financial performance. All revenue is attributed to customers based in the United States and substantially all the Company’s long-lived assets are located in the United States. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. The Company bases its estimates on historical experience, market conditions, and on various other assumptions that are believed to be reasonable. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include the useful life and salvage value of rental product, incremental borrowing rate to determine lease liabilities, and the valuation of share-based compensation and warrants. As of April 30, 2023, the effects of the macroeconomic environment on the Company’s business, results of operations, and financial condition continue to evolve. As a result, many of the Company’s estimates and assumptions required increased judgment and carry a higher degree of variability and volatility. As additional information becomes available, the Company’s estimates may change materially in future periods. |
Concentrations of Credit Risks | Concentrations of Credit Risks Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents. The Company places its cash investments with high credit quality financial institutions. The Company believes no significant credit risk exists with respect to these financial instruments. No single customer accounted for more than 5% of the Company’s revenue during the three months ended April 30, 2023 and 2022. |
Fair Value Measurements and Financial Instruments | Fair Value Measurements and Financial Instruments Fair value accounting is applied for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the condensed consolidated financial statements on a recurring basis, at least annually. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities recorded at fair value in the condensed consolidated financial statements are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Hierarchical levels, which are directly related to the amount of subjectivity, associated with the inputs to the valuation of these assets or liabilities, are as follows: Level 1: Observable inputs, such as quoted prices in active markets for identical assets and liabilities. Level 2: Inputs other than the quoted prices in active markets that are observable either directly or indirectly. Level 3: Unobservable inputs, in which there is little or no market data which require the Company to develop its own assumptions. Observable inputs are based on market data obtained from independent sources. Unobservable inputs reflect the Company’s assessment of the assumptions market participants would use to value certain financial instruments. This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. The categorization of financial instruments within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. |
Prepaid Expenses and Other Current Assets | Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consist primarily of accounts receivable, net, interest receivable, prepaid insurance, prepaid technology expenses and prepaid taxes. |
Rental Product, Net | Rental Product, Net The Company considers rental product to be a long-term productive asset and, as such, classifies it as a noncurrent asset on the condensed consolidated balance sheets. Rental product is stated at cost, less accumulated depreciation. The Company depreciates rental product, less an estimated salvage value, over the estimated useful lives of the assets using the straight-line method. The useful life is determined based on historical trends and an assessment of any future changes. The salvage value considers the historical trends and projected liquidation proceeds for the assets. The estimated useful lives and salvage values are described below: Useful Life Salvage Value Apparel 3 years 20 % Accessories 2 years 30 % In accordance with its policy, the Company reviews the estimated useful lives and salvage values of rental product on an ongoing basis. The Company offers its customers an opportunity to purchase items prior to the end of their useful life. In such instances, the Company considers the disposal of rental product to be a sale and, as such, records the proceeds as other revenue and the net book value of the items at the time of sale as rental product depreciation in the condensed consolidated statements of operations within rental product depreciation and revenue share. Write-offs for losses on lost, damaged, and unreturned apparel and accessories are also recorded within rental product depreciation and revenue share. Once it is no longer considered rentable, rental product in a sellable condition is classified as held for sale and written down to salvage value. The value of rental product held for sale as of April 30, 2023 and January 31, 2023 was $3.0 million and $3.0 million, respectively. The accelerated depreciation related to rental product held for sale was $0.9 million and $1.4 million for the three months ended April 30, 2023 and 2022 , respectively. The accelerated depreciation is presented on the condensed consolidated statements of operations within rental product depreciation and revenue share. When rental product is liquidated, the Company records the gain or loss calculated as proceeds, net of the remaining salvage value and costs to sell, within general and administrative expenses on the condensed consolidated statement of operations. The gain or loss from the liquidation of rental product is included as an adjustment to reconcile net loss to net cash used by operating activities in the condensed consolidated statements of cash flows. The purchases of rental product, as well as the proceeds from the sale and liquidation of rental product, are classified as cash flows from investing activities on the condensed consolidated statements of cash flows because the predominant activity of the rental product purchased is to generate rental revenue and such classification is consistent with the classification of long-term asset activity. Proceeds from the sale of rental product were $5.4 million and $4.0 million for the three months ended April 30, 2023 and 2022, respectively. |
Revenue Recognition | Revenue Recognition Subscription and a-la-carte rental fees (“Subscription and Reserve rental revenue”) are recognized in accordance with Accounting Standard Update (“ASU”) 2016-02 , Leases, Topic 842 (“ASC 842”). Other revenue, primarily related to the sale of rental product, is recognized under ASU 2014-09, Revenue from Contracts with Customers, Topic 606 (“ASC 606”) at the date of delivery of the product to the customer. Other revenue represented 10% and 8% of total revenue for the three months ended April 30, 2023 and 2022 , respectively. Revenue is presented net of promotional discounts, customer credits and refunds. Promotional discounts are recognized in accordance with either ASC 842 or ASC 606, based on the guidance applied to the rental fees or product sales to which the promotional discounts are related. Revenue is presented net of taxes that are collected from customers and remitted to governmental authorities. The Company recognizes a liability at the time a customer credit or a gift card is issued, and revenue is recognized upon redemption of the credit or gift card. The Company’s customer credit liability is presented on the condensed consolidated balance sheets. During the three months ended April 30, 2023, $0.7 million of credits included in the customer credit liability as of January 31, 2023 were redeemed. Customer credits and gift cards do not have expiration dates. Over time, a portion of these instruments is not redeemed. The Company recognizes breakage income related to these instruments based on the redemption pattern method. The Company continues to maintain the full liability for the unredeemed portion of the credits and gift cards when the Company has any legal obligation to remit such credits to government authorities in relevant jurisdictions. |
Subscription and Reserve Rental Revenue | Subscription and Reserve Rental Revenue Subscription fees are recognized ratably over the subscription period, commencing on the date the subscriber enrolls in the rental program. The fees are collected upon enrollment. The subscription automatically renews on a monthly basis until cancelled or paused by the customer. Subscribers can pause or cancel their subscriptions at any time. The Company recognizes fees for a-la-carte rentals ratably over the rental period, which starts with the date of delivery of rental product to the customer. A-la-carte rental orders can be placed up to four months prior to the rental start date and the customer’s payment form is charged upon order confirmation. The Company defers recognizing the fees and any related promotions for a-la-carte rentals until the date of delivery, and then recognizes those fees ratably over the four eight The Company accrues for credits and refunds issued subsequent to the balance sheet date that relate to rentals prior to the balance sheet date. These amounts were not material as of April 30, 2023 and January 31, 2023. |
Other Revenue | Other Revenue Other revenue consists primarily of revenue from the sale of rental product. The Company recognizes revenue from the sale of rental product in accordance with ASC 606. Sale of rental product occurs when a customer purchases rental product at a discounted price, calculated as a percentage of retail value. Payment is due upon order confirmation and there is no financing component. The single performance obligation associated with rental product sales is generally satisfied upon delivery of the rental product to the customer. The Company does not have any material contractual assets or liabilities with respect to other revenue as of April 30, 2023 and January 31, 2023. From time to time, Other revenue may include revenue generated from pilots and other growth initiatives which may cause quarterly fluctuations in the Other revenue line. |
Share-Based Compensation | Share-Based Compensation The Company recognizes all employee share-based compensation as an expense in the condensed consolidated financial statements. Equity classified awards are measured at the grant date fair value of the award. The Company estimates grant date fair value of stock options using the Black-Scholes option pricing model. The fair value of stock options is recognized as compensation expense on a straight-line basis over the requisite service period of the award. Determining the fair value of options at the grant date requires judgment, including the expected term that stock options will be outstanding prior to exercise, the associated volatility, and the expected dividend yield. The fair value of common stock is based on the closing price of the common stock on the date of grant as reported on the Nasdaq Stock Market. Upon grant of awards, the Company also estimates an amount of forfeitures that will occur prior to vesting. The Company has granted two types of restricted stock units (“RSUs”). Prior to the effectiveness of the Company’s initial public offering (“IPO”), the Company granted RSUs which vest only upon satisfaction of both time-based service and liquidity-based conditions. The Company records share-based compensation expense for such RSUs on an accelerated attribution method over the requisite service period and only once the liquidity-based condition is satisfied. The liquidity-based vesting condition was satisfied upon the effectiveness of the Company’s IPO |
Recently Issued and Adopted Accounting Pronouncements | Recently Issued and Adopted Accounting Pronouncements Recently Adopted Accounting Pronouncements Financial Instruments – Credit Losses In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , which requires an entity to utilize a new impairment model known as the current expected credit loss (“CECL”) model to estimate its lifetime “expected credit loss” and record an allowance that, when deducted from the amortized cost basis of the financial asset, presents the net amount expected to be collected on the financial asset. The CECL model is expected to result in more timely recognition of credit losses. This guidance also requires new disclosures for financial assets measured at amortized cost, loans, and available-for-sale debt securities. This standard is effective for annual reporting periods beginning after December 15, 2022, and interim periods within those years, and early adoption is permitted. The Company adopted this standard on February 1, 2023, and the adoption of this standard did not have a material impact on the condensed consolidated financial statements. Recently Issued Accounting Pronouncements Debt - Debt with Conversion and Other Options and Derivatives and Hedging In August 2020, the FASB issued ASU 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. The new guidance reduces complexity and improves comparability of financial reporting associated with accounting for convertible instruments and contracts in an entity’s own equity. This standard is effective for annual reporting periods beginning after December 15, 2023, and interim periods within those years, and early adoption is permitted. The adoption of this standard is not expected to have a material impact on the condensed consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Apr. 30, 2023 | |
Accounting Policies [Abstract] | |
Schedule of Estimated Useful Lives and Salvage Values | The estimated useful lives and salvage values are described below: Useful Life Salvage Value Apparel 3 years 20 % Accessories 2 years 30 % |
Leases - Lessee Accounting (Tab
Leases - Lessee Accounting (Tables) | 3 Months Ended |
Apr. 30, 2023 | |
Leases [Abstract] | |
Lessee Lease Obligations - Operating Lease | The following table summarizes the Company’s minimum fixed lease obligations under existing agreements as a lessee, excluding variable payments and short-term lease payments, as of April 30, 2023: Operating Financing Fiscal year: 2023 $ 8.1 $ 0.5 2024 9.5 0.5 2025 8.2 0.2 2026 8.1 — 2027 7.9 — Thereafter 34.7 — Total minimum lease payments 76.5 1.2 Imputed interest (34.9) (0.2) Lease liabilities as of April 30, 2023 $ 41.6 $ 1.0 |
Lessee Lease Obligations - Finance Lease | The following table summarizes the Company’s minimum fixed lease obligations under existing agreements as a lessee, excluding variable payments and short-term lease payments, as of April 30, 2023: Operating Financing Fiscal year: 2023 $ 8.1 $ 0.5 2024 9.5 0.5 2025 8.2 0.2 2026 8.1 — 2027 7.9 — Thereafter 34.7 — Total minimum lease payments 76.5 1.2 Imputed interest (34.9) (0.2) Lease liabilities as of April 30, 2023 $ 41.6 $ 1.0 |
Rental Product, Net (Tables)
Rental Product, Net (Tables) | 3 Months Ended |
Apr. 30, 2023 | |
Rental Product [Abstract] | |
Rental Product Breakdown | Rental product, net consisted of the following: April 30, January 31, 2023 2023 Apparel $ 162.9 $ 156.7 Accessories 5.7 5.9 168.6 162.6 Less: accumulated depreciation (80.8) (83.9) Rental product, net $ 87.8 $ 78.7 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 3 Months Ended |
Apr. 30, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Line of Credit and Long-Term Debt Outstanding | The following table summarizes the Company’s line of credit and long-term debt outstanding as of April 30, 2023 and January 31, 2023: April 30, January 31, 2023 2023 Temasek Facility principal outstanding $ 271.6 $ 271.6 Add: payment-in-kind interest 25.0 17.8 Less: unamortized debt discount (15.4) (16.9) Temasek Facility, net 281.2 272.5 Less: current portion of long-term debt — — Total noncurrent line of credit and long-term debt $ 281.2 $ 272.5 |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 3 Months Ended |
Apr. 30, 2023 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses | Accrued expenses and other current liabilities consisted of the following: April 30, January 31, 2023 2023 Accrued operating and general expenses $ 9.1 $ 6.0 Revenue share payable 5.9 5.3 Accrued payroll related expenses 2.5 4.7 Sales and other taxes 2.4 2.7 Accrued interest 1.4 5.1 Gift card liability 0.5 0.6 Accrued expenses and other current liabilities $ 21.8 $ 24.4 |
Schedule of Other Current Liabilities | Accrued expenses and other current liabilities consisted of the following: April 30, January 31, 2023 2023 Accrued operating and general expenses $ 9.1 $ 6.0 Revenue share payable 5.9 5.3 Accrued payroll related expenses 2.5 4.7 Sales and other taxes 2.4 2.7 Accrued interest 1.4 5.1 Gift card liability 0.5 0.6 Accrued expenses and other current liabilities $ 21.8 $ 24.4 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Apr. 30, 2023 | |
Equity [Abstract] | |
Schedule of Stockholders' Equity Note, Warrants or Rights | As of April 30, 2023 and January 31, 2023, the Company had the following outstanding warrants: April 30, 2023 Outstanding Warrants Date Number of Class of Exercise Fair Value Equity classified: TriplePoint Nov-16 82,891 Common $ 7.54 $ 0.3 TriplePoint Jun-17 18,236 Common 7.54 0.1 TriplePoint Sep-17 14,920 Common 7.54 0.1 TriplePoint Jan-18 16,578 Common 7.54 0.1 TriplePoint Apr-18 16,578 Common 7.54 0.1 TriplePoint Nov-15 35,215 Common 17.04 0.2 TriplePoint Jun-16 28,172 Common 17.04 0.2 TriplePoint Sep-16 24,650 Common 17.04 0.1 Double Helix (Temasek) Oct-21 394,343 Common 21.00 5.3 Double Helix (Temasek) Jan-23 2,000,000 Common 5.00 6.9 2,631,583 $ 13.4 The warrant for 730,000 shares of common stock issued to Double Helix (Temasek) in July 2018 with an exercise price of $27.40 per share expired unexercised during the three months ended April 30, 2022. See Note 6 - Long-Term Debt for details of the warrants issued to Temasek in January 2023. January 31, 2023 Outstanding Warrants Date Number of Class of Exercise Fair Value Equity classified: TriplePoint Nov-16 82,891 Common $ 7.54 $ 0.3 TriplePoint Jun-17 18,236 Common 7.54 0.1 TriplePoint Sep-17 14,920 Common 7.54 0.1 TriplePoint Jan-18 16,578 Common 7.54 0.1 TriplePoint Apr-18 16,578 Common 7.54 0.1 TriplePoint Nov-15 35,215 Common 17.04 0.2 TriplePoint Jun-16 28,172 Common 17.04 0.2 TriplePoint Sep-16 24,650 Common 17.04 0.1 Double Helix (Temasek) Oct-21 394,343 Common 21.00 5.3 Double Helix (Temasek) Jan-23 2,000,000 Common 5.00 6.9 2,631,583 $ 13.4 |
Share-based Compensation Plans
Share-based Compensation Plans (Tables) | 3 Months Ended |
Apr. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Stock Options Roll Forward | Stock option activity during the period indicated is as follows: Number of Weighted Weighted Aggregate Balances as of January 31, 2023 8,060,647 $ 7.33 6.37 $ 0.4 Granted — — Exercised — — Forfeited (83,256) 7.92 Balances as of April 30, 2023 7,977,391 $ 7.32 6.14 $ — Exercisable as of April 30, 2023 6,078,894 $ 7.17 5.63 $ — |
Share-based Payment Arrangement, Restricted Stock and Restricted Stock Unit, Activity | RSUs activity during the period indicated is as follows: Number of Weighted Unvested and outstanding as of January 31, 2023 5,976,121 $ 5.64 Granted 5,390,172 2.99 Vested/Released (1,658,355) 5.59 Forfeited (79,014) 4.29 Unvested and outstanding as of April 30, 2023 9,628,924 $ 4.18 |
Share-based Payment Arrangement, Expensed and Capitalized, Amount | The classification of share-based compensation for the three months ended April 30, 2023 and 2022, respectively, presented within each line item of the condensed consolidated statements of operations is as follows: Three Months Ended April 30, 2023 2022 Technology $ 1.9 $ 1.2 Marketing 0.1 0.2 General and administrative 6.8 4.1 Total share-based compensation $ 8.8 $ 5.5 |
Net Loss per Share Attributab_2
Net Loss per Share Attributable to Common Stockholders (Tables) | 3 Months Ended |
Apr. 30, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table sets forth the computation of basic and diluted net loss per share attributable to common stockholders: Three Months Ended April 30, 2023 2022 Numerator: Net loss attributable to common stockholders $ (30.1) $ (42.5) Denominator: Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted 65,865,906 63,431,165 Net loss per share attributable to common stockholders, basic and diluted $ (0.46) $ (0.67) |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following potentially dilutive outstanding securities based on amounts outstanding at each period end were excluded from the computation of diluted loss per share attributable to common stockholders because including them would have been anti-dilutive: Three Months Ended April 30, 2023 2022 Stock options 7,977,391 9,180,984 Common stock warrants 2,631,583 631,583 RSUs 9,628,924 5,836,908 Total 20,237,898 15,649,475 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Narrative (Details) | 3 Months Ended | ||
Apr. 30, 2023 USD ($) partner segment | Apr. 30, 2022 USD ($) | Jan. 31, 2023 USD ($) partner | |
Accounting Policies [Line Items] | |||
Number of reportable segments | segment | 1 | ||
Number of operating segments | segment | 1 | ||
Accounts receivable, net | $ 4,100,000 | $ 4,000,000 | |
Allowance for doubtful accounts | $ 0 | $ 0 | |
Number of third party partners | partner | 1 | 1 | |
Rental product held-for-sale | $ 3,000,000 | $ 3,000,000 | |
Accelerated depreciation | 900,000 | $ 1,400,000 | |
Proceeds from sale of rental product | 5,400,000 | $ 4,000,000 | |
Customer credits and refunds, including opening balance | $ 700,000 | ||
Time for order placement | 4 months | ||
Minimum | |||
Accounting Policies [Line Items] | |||
Rental period | 4 years | ||
Maximum | |||
Accounting Policies [Line Items] | |||
Rental period | 8 days | ||
Apparel and accessories | Revenue benchmark | Product concentration risk | |||
Accounting Policies [Line Items] | |||
Concentration risk, percentage | 10% | 8% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Estimated Useful Lives and Salvage Values (Details) | 3 Months Ended |
Apr. 30, 2023 | |
Apparel | |
Accounting Policies [Line Items] | |
Useful Life | 3 years |
Salvage Value | 20% |
Accessories | |
Accounting Policies [Line Items] | |
Useful Life | 2 years |
Salvage Value | 30% |
Liquidity (Details)
Liquidity (Details) - USD ($) $ in Millions | 1 Months Ended | |||
Sep. 30, 2022 | Apr. 30, 2023 | Jan. 31, 2023 | Apr. 30, 2022 | |
Liquidity [Abstract] | ||||
Annual operating expense savings | $ 25 | |||
Cash and cash equivalents | $ 141.4 | $ 154.5 | $ 219 |
Leases - Lessee Accounting - Na
Leases - Lessee Accounting - Narrative (Details) $ in Millions | 3 Months Ended |
Apr. 30, 2022 USD ($) floor | |
Leases [Abstract] | |
Number of floors terminated | floor | 1 |
Reduction to future minimum fixed lease obligations | $ 10.6 |
Operating lease, liabilities, adjustment for lease modification | 3.7 |
Operating lease, right-of-use asset, adjustment for lease modification | 1.4 |
Gain on partial termination of lease | 1.8 |
Loss on surrender of fixed assets | $ 1.9 |
Leases - Lessee Accounting - Ma
Leases - Lessee Accounting - Maturities of Operating and Financing Lease Obligations (Details) $ in Millions | Apr. 30, 2023 USD ($) |
Operating | |
2023 | $ 8.1 |
2024 | 9.5 |
2025 | 8.2 |
2026 | 8.1 |
2027 | 7.9 |
Thereafter | 34.7 |
Total minimum lease payments | 76.5 |
Imputed interest | (34.9) |
Lease liabilities as of April 30, 2023 | 41.6 |
Financing | |
2023 | 0.5 |
2024 | 0.5 |
2025 | 0.2 |
2026 | 0 |
2027 | 0 |
Thereafter | 0 |
Total minimum lease payments | 1.2 |
Imputed interest | (0.2) |
Lease liabilities as of April 30, 2023 | $ 1 |
Rental Product, Net - Rental Pr
Rental Product, Net - Rental Product Breakdown (Details) - USD ($) $ in Millions | Apr. 30, 2023 | Jan. 31, 2023 |
Rental Product [Line Items] | ||
Rental product, gross | $ 168.6 | $ 162.6 |
Less: accumulated depreciation | (80.8) | (83.9) |
Rental product, net | 87.8 | 78.7 |
Apparel | ||
Rental Product [Line Items] | ||
Rental product, gross | 162.9 | 156.7 |
Accessories | ||
Rental Product [Line Items] | ||
Rental product, gross | $ 5.7 | $ 5.9 |
Rental Product, Net - Narrative
Rental Product, Net - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 30, 2023 | Apr. 30, 2022 | |
Rental Product [Abstract] | ||
Depreciation and write-offs, rental product and rental product sold | $ 12.1 | $ 13.6 |
Long-Term Debt - Schedule of Lo
Long-Term Debt - Schedule of Long-Term Debt (Details) - USD ($) $ in Millions | Apr. 30, 2023 | Jan. 31, 2023 |
Debt Instrument [Line Items] | ||
Less: current portion of long-term debt | $ 0 | $ 0 |
Total noncurrent line of credit and long-term debt | 281.2 | 272.5 |
Temasek Term Loan | ||
Debt Instrument [Line Items] | ||
Temasek Facility, net | 281.2 | 272.5 |
Term Loan | Temasek Term Loan | ||
Debt Instrument [Line Items] | ||
Temasek Facility principal outstanding | 271.6 | 271.6 |
Add: payment-in-kind interest | 25 | 17.8 |
Less: unamortized debt discount | $ (15.4) | $ (16.9) |
Long-Term Debt - Narrative (Det
Long-Term Debt - Narrative (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 1 Months Ended | |||||
Jan. 31, 2023 | Oct. 31, 2021 | Oct. 27, 2021 | Mar. 31, 2020 | Nov. 30, 2019 | Jul. 31, 2018 | |
Debt Instrument [Line Items] | ||||||
Liquidity maintenance covenant | $ 50 | |||||
Initial Temasek Committment | Term Loan | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, face amount | $ 50 | $ 50 | $ 100 | |||
Debt instrument, additional borrowing capacity | $ 100 | |||||
Interest rate, paid in kind (in percent) | 15% | |||||
Subsequent Temasek Commitment | Term Loan | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, face amount | $ 30 | |||||
Debt instrument, additional borrowing capacity | $ 30 | |||||
Interest rate, cash (in percent) | 13% | |||||
Repayments of long-term debt | $ 30 | |||||
Initial Temasek Facility and Amended Temasek Facility | Term Loan | ||||||
Debt Instrument [Line Items] | ||||||
Repayments of long-term debt | 60 | |||||
Temasek Term Loan | Term Loan | ||||||
Debt Instrument [Line Items] | ||||||
Effective interest rate (in percent) | 15.95% | |||||
Temasek Facility Amendment | Term Loan | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, face amount | $ 271.6 | |||||
Interest rate, paid in kind (in percent) | 5% | |||||
Repayments of long-term debt | $ 30 | |||||
Effective interest rate (in percent) | 15.15% | |||||
Debt discount | $ 6.9 | 15.3 | ||||
Closing fees paid | 0.2 | |||||
Allocation of proceeds to warrants issued | 5.3 | |||||
Extension of term warrants | 1 | |||||
Amendment fee | $ 8.8 | |||||
Amended interest rate (in percent) | 13% | 12% | ||||
Temasek Facility Amendment Two | Term Loan | ||||||
Debt Instrument [Line Items] | ||||||
Effective interest rate (in percent) | 14.29% | |||||
Stated interest rat through 2024 (in percent) | 2% | |||||
Interest rate after July 2024 (in percent) | 5% | |||||
Increase (decrease) in interest rate (percent) | 1% | |||||
Number of securities called by warrant (in shares) | 2 | |||||
Exercise price of common stock warrants (in usd per share) | $ 5 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | Apr. 30, 2023 | Jan. 31, 2023 |
Income Tax Disclosure [Abstract] | ||
Unrecognized tax benefits | $ 0.9 | $ 0.9 |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Millions | Apr. 30, 2023 | Jan. 31, 2023 |
Payables and Accruals [Abstract] | ||
Accrued operating and general expenses | $ 9.1 | $ 6 |
Revenue share payable | 5.9 | 5.3 |
Accrued payroll related expenses | 2.5 | 4.7 |
Sales and other taxes | 2.4 | 2.7 |
Accrued interest | 1.4 | 5.1 |
Gift card liability | 0.5 | 0.6 |
Accrued expenses and other current liabilities | $ 21.8 | $ 24.4 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) $ in Millions | Apr. 30, 2023 USD ($) |
Fair Value Disclosures [Abstract] | |
Long-term debt, fair value | $ 276.7 |
Stockholders' Equity - Narrativ
Stockholders' Equity - Narrative (Details) | Apr. 30, 2023 vote $ / shares shares | Jan. 31, 2023 $ / shares shares | Apr. 30, 2022 $ / shares shares |
Class of Warrant or Right [Line Items] | |||
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 | |
Preferred stock, par value (usd per share) | $ / shares | $ 0.001 | $ 0.001 | |
Preferred stock, shares issued (in shares) | 0 | 0 | |
Preferred stock, shares outstanding (in shares) | 0 | 0 | |
Double Helix Temasek Equity-Classified Common Stock Warrants One Issued Jul 2018 | |||
Class of Warrant or Right [Line Items] | |||
Number of shares (in shares) | 730,000 | ||
Exercise price of common stock warrants (in usd per share) | $ / shares | $ 27.40 | ||
Common Class A | |||
Class of Warrant or Right [Line Items] | |||
Votes per common share | vote | 1 | ||
Common Class B | |||
Class of Warrant or Right [Line Items] | |||
Votes per common share | vote | 20 | ||
Preferred Stock | |||
Class of Warrant or Right [Line Items] | |||
Preferred stock, shares issued (in shares) | 0 | ||
Preferred stock, shares outstanding (in shares) | 0 | ||
Preferred Stock | IPO | |||
Class of Warrant or Right [Line Items] | |||
Preferred stock, shares authorized (in shares) | 10,000,000 | ||
Preferred stock, par value (usd per share) | $ / shares | $ 0.001 |
Stockholders' Equity - Warrants
Stockholders' Equity - Warrants (Details) - USD ($) $ / shares in Units, $ in Millions | Apr. 30, 2023 | Jan. 31, 2023 |
TriplePoint Equity-Classified Common Stock Warrants Issued Nov 2016 | ||
Class of Warrant or Right [Line Items] | ||
Number of Shares (in shares) | 82,891 | 82,891 |
Exercise Price (usd per share) | $ 7.54 | $ 7.54 |
Fair Value at Issuance | $ 0.3 | $ 0.3 |
TriplePoint Equity-Classified Common Stock Warrants Issued Jun 2017 | ||
Class of Warrant or Right [Line Items] | ||
Number of Shares (in shares) | 18,236 | 18,236 |
Exercise Price (usd per share) | $ 7.54 | $ 7.54 |
Fair Value at Issuance | $ 0.1 | $ 0.1 |
TriplePoint Equity-Classified Common Stock Warrants Issued Sep 2017 | ||
Class of Warrant or Right [Line Items] | ||
Number of Shares (in shares) | 14,920 | 14,920 |
Exercise Price (usd per share) | $ 7.54 | $ 7.54 |
Fair Value at Issuance | $ 0.1 | $ 0.1 |
TriplePoint Equity-Classified Common Stock Warrants Issued Jan 2018 | ||
Class of Warrant or Right [Line Items] | ||
Number of Shares (in shares) | 16,578 | 16,578 |
Exercise Price (usd per share) | $ 7.54 | $ 7.54 |
Fair Value at Issuance | $ 0.1 | $ 0.1 |
TriplePoint Equity-Classified Common Stock Warrants Issued Apr 2018 | ||
Class of Warrant or Right [Line Items] | ||
Number of Shares (in shares) | 16,578 | 16,578 |
Exercise Price (usd per share) | $ 7.54 | $ 7.54 |
Fair Value at Issuance | $ 0.1 | $ 0.1 |
TriplePoint Equity-Classified Common Stock Warrants Issued Nov 2015 | ||
Class of Warrant or Right [Line Items] | ||
Number of Shares (in shares) | 35,215 | 35,215 |
Exercise Price (usd per share) | $ 17.04 | $ 17.04 |
Fair Value at Issuance | $ 0.2 | $ 0.2 |
TriplePoint Equity-Classified Common Stock Warrants Issued Jun 2016 | ||
Class of Warrant or Right [Line Items] | ||
Number of Shares (in shares) | 28,172 | 28,172 |
Exercise Price (usd per share) | $ 17.04 | $ 17.04 |
Fair Value at Issuance | $ 0.2 | $ 0.2 |
TriplePoint Equity-Classified Common Stock Warrants Issued Sep 2016 | ||
Class of Warrant or Right [Line Items] | ||
Number of Shares (in shares) | 24,650 | 24,650 |
Exercise Price (usd per share) | $ 17.04 | $ 17.04 |
Fair Value at Issuance | $ 0.1 | $ 0.1 |
Double Helix Temasek Equity-Classified Common Stock Warrants Two Issued October 2021 | ||
Class of Warrant or Right [Line Items] | ||
Number of Shares (in shares) | 394,343 | 394,343 |
Exercise Price (usd per share) | $ 21 | $ 21 |
Fair Value at Issuance | $ 5.3 | $ 5.3 |
Double Helix Temasek Equity-Classified Common Stock Warrants Two Issued January 2023 | ||
Class of Warrant or Right [Line Items] | ||
Number of Shares (in shares) | 2,000,000 | 2,000,000 |
Exercise Price (usd per share) | $ 5 | $ 5 |
Fair Value at Issuance | $ 6.9 | $ 6.9 |
Equity Classified Common Stock Warrants | ||
Class of Warrant or Right [Line Items] | ||
Number of Shares (in shares) | 2,631,583 | 2,631,583 |
Fair Value at Issuance | $ 13.4 | $ 13.4 |
Share-based Compensation Plan_2
Share-based Compensation Plans - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Apr. 30, 2023 | Jan. 31, 2022 | Jan. 31, 2020 | |
General and administrative | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock option modification, incremental compensation expense | $ 1.9 | ||
Stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unrecognized compensation cost period for recognition | 2 years | ||
Restricted Stock Units (RSUs) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unrecognized compensation cost period for recognition | 1 year 9 months 18 days | ||
Unrecorded compensation expense | $ 23.2 | ||
2019 Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unrecognized compensation cost | $ 7.1 | ||
2019 Plan | Stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award expiration period | 10 years | ||
Award vesting period | 4 years | ||
2019 Plan | Restricted Stock Units (RSUs) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 4 years | ||
2021 Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Common stock reserved (in shares) | 1,997,050 | ||
2021 Plan | Restricted Stock Units (RSUs) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 4 years | ||
2021 Plan | Restricted Stock Units (RSUs) | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 1 year | ||
2021 Plan | Restricted Stock Units (RSUs) | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 2 years |
Share-based Compensation Plan_3
Share-based Compensation Plans - Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended |
Apr. 30, 2023 | Jan. 31, 2023 | |
Weighted Average Exercise Price | ||
Balances, Beginning (in usd per share) | $ 7.33 | |
Granted (in usd per share) | 0 | |
Exercised (in usd per share) | 0 | |
Forfeited (in usd per share) | 7.92 | |
Balances, Ending (in usd per share) | 7.32 | $ 7.33 |
Exercisable (in usd per share) | $ 7.17 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | ||
Weighted Average Remaining Contractual Term, Outstanding (in years) | 6 years 1 month 20 days | 6 years 4 months 13 days |
Aggregate Intrinsic Value | $ 0 | $ 0.4 |
Exercisable, Weighted Average Remaining Contract Term (in years) | 5 years 7 months 17 days | |
Exercisable, Aggregate Intrinsic Value | $ 0 | |
2019 Plan | ||
Number of Shares | ||
Balances Beginning (shares) | 8,060,647 | |
Granted (in shares) | 0 | |
Exercised (in shares) | 0 | |
Forfeited (in shares) | (83,256) | |
Balances, Ending (in shares) | 7,977,391 | 8,060,647 |
Exercisable (in shares) | 6,078,894 |
Share-based Compensation Plan_4
Share-based Compensation Plans - RSU Activity (Details) - Restricted Stock Units (RSUs) | 3 Months Ended |
Apr. 30, 2023 $ / shares shares | |
Number of Shares | |
Unvested and outstanding, beginning balance (in shares) | shares | 5,976,121 |
Granted (unaudited) (in shares) | shares | 5,390,172 |
Vested/Released (unaudited) (in shares) | shares | (1,658,355) |
Forfeited (unaudited) (in shares) | shares | (79,014) |
Unvested and outstanding, ending balance (in shares) | shares | 9,628,924 |
Weighted Average Grant-Date Fair Value per Share | |
Unvested and outstanding, beginning balance (in usd per share) | $ / shares | $ 5.64 |
Granted (in usd per share) | $ / shares | 2.99 |
Vested/Released (in usd per share) | $ / shares | 5.59 |
Forfeited (in usd per share) | $ / shares | 4.29 |
Unvested and outstanding, ending balance (in usd per share) | $ / shares | $ 4.18 |
Share-based Compensation Plan_5
Share-based Compensation Plans - Classification of Share-based Compensation Expense (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 30, 2023 | Apr. 30, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation | $ 8.8 | $ 5.5 |
Technology | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation | 1.9 | 1.2 |
Marketing | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation | 0.1 | 0.2 |
General and administrative | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation | $ 6.8 | $ 4.1 |
Net Loss per Share Attributab_3
Net Loss per Share Attributable to Common Stockholders - Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Apr. 30, 2023 | Apr. 30, 2022 | |
Numerator: | ||
Net loss attributable to common stockholders | $ (30.1) | $ (42.5) |
Denominator: | ||
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic (in shares) | 65,865,906 | 63,431,165 |
Weighted-average shares used in computing net loss per share attributable to common stockholders, diluted (in shares) | 65,865,906 | 63,431,165 |
Net loss per share attributable to common stockholders, basic (usd per share) | $ (0.46) | $ (0.67) |
Net loss per share attributable to common stockholders, diluted (usd per share) | $ (0.46) | $ (0.67) |
Net Loss per Share Attributab_4
Net Loss per Share Attributable to Common Stockholders - Schedule of Antidilutive Securities (Details) - shares | 3 Months Ended | |
Apr. 30, 2023 | Apr. 30, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from the computation of earnings per share (in shares) | 20,237,898 | 15,649,475 |
Stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from the computation of earnings per share (in shares) | 7,977,391 | 9,180,984 |
Common stock warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from the computation of earnings per share (in shares) | 2,631,583 | 631,583 |
RSUs | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from the computation of earnings per share (in shares) | 9,628,924 | 5,836,908 |
Commitment and Contingencies (D
Commitment and Contingencies (Details) - USD ($) $ in Millions | Apr. 30, 2023 | Jan. 31, 2023 |
Cash-Collateralized Standby Letters of Credit | ||
Line of Credit Facility [Line Items] | ||
Restricted cash | $ 10 | $ 9.1 |