Rent the Runway eliminates credit facility interest for six quarters

By Wendy Van Sickle

Columbus, Ohio, Dec. 5 – Rent the Runway Inc. announced on Tuesday that it amended its credit facility to eliminate both cash and PIK interest for six fiscal quarters and reduce the minimum liquidity covenant to $30 million from $50 million, among other changes, according to a news release.

The elimination of interest begins with the fourth quarter of 2023.

The amendment also instates quarterly and annual expense caps on inventory capex, marketing and fixed operating expenses.

The news release quoted the company’s co-founder and chief executive officer Jennifer Hyman as saying the company expects the amendment will enable the company to “achieve significant free cash flow before the debt’s maturity date, helping us to demonstrate the strength of our business model to the market – and, importantly, to grow.”

Rent the Runway is a Brooklyn, N.Y.-based subscription fashion service.

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