Rent The Runway: To Close All Stores

On August 14, 2020 CNBC reported that Rent The Runway announced its intention to permanently close its 5 retail locations, all in major U.S. cities. As you can imagine, this is the result of Covid-19 that had already forced the temporary closure of these “brick and mortar” stores. The company, though, plans to continue operating its e-commerce capability and improve its network of drop boxes.

There are two venture oriented BDCs with exposure to the company: SuRo Capital (SSSS) and public BDC TriplePoint Venture Growth (TPVG), with total exposure of $6.4mn at cost. SSSS added $5.0mn in the IIQ 2020, presumably to bolster the company’s finances. TPVG’s investment is in preferred and equity, and valued at a premium to cost. That’s likely to change given the retail location closure but the amounts involved are unlikely to have a material impact, and there is no investment income involved.

We are adding the company to the underperformers list, with a Corporate Credit Rating of 3.