The company provides clothing rentals where users book and rent outfits from designer brands online. It opened the Galway outpost in 2019 with a commitment to hire 150 people over three years.
Earlier this month the company – once valued at over $1bn (€901bn) but now worth less than $50m – announced a corporate restructuring of its debt as it contends with a drop in subscriber numbers.
While announcing its third-quarter earnings, the company said that moving more tech functions to Galway from its headquarters in New York would assist in reducing overheads.
Ms Hyman said the business had been in a slump since Covid. Photo: Getty
In a statement, the company said it has “further internationalised our technology team by relocating roles from NYC to Galway, Ireland, which is expected to result in lower technology costs for the remainder of fiscal year 2023 and for fiscal year 2024”.
“[The company] is leveraging our existing strong presence and technical leadership at our Galway, Ireland EU software development hub, which was established in 2019.”
A spokesperson for Rent the Runway declined to comment on how many roles are being relocated to Galway.
The company did not comment on the number of staff it currently has in Galway. The most recent accounts filed by Rent the Runway’s Irish entity with the Companies Registration Office for the year ended January 2023 show the company had 68 employees in Ireland.
Rent the Runway’s moving of functions to Galway is part of a broader effort to reduce costs, including a restructuring of its debt.
It announced a deal with lenders that would see the company pay no interest for the next six quarters.
Platform is in ‘investor purgatory’. There’s zero belief in the business from investors’ standpoint
Chief executive Jennifer Hyman said the restructuring will “provide meaningful flexibility for our business”.
Rent the Runway floated on the Nasdaq in October 2021 with a valuation of $1.7bn but its stock price has plummeted in the two years since. Its current market cap is $47.5m.
It reported a drop in revenue in the last quarter with earnings down to $72.5m from $77.4m year-on-year with a net loss of $31.5m.
Its active subscriber numbers fell from 134,240 to 131,725 year-over-year.
Speaking to Yahoo Finance, Hyman said that the company has been in a slump since Covid, with stalled growth as fewer people were renting outfits for work or social events.
The company is in an “investor purgatory”, she said, “in that there’s zero belief in the business from an investor standpoint”.
She said that the company’s balance sheet was “out of whack” due to the debt it took on during Covid to see the business through the pandemic.
