A designer retailer now announces an unexpected 10% layoff of its corporate staff, part of a new restructuring plan to save millions.
Rent the Runway says the move is part of a plan that will result in $11 million to $13 million in annualized run rate cash savings.
The 10% layoff accounts for 37 of the company’s corporate roles, the company disclosed in a Form 8-K filed with the Securities and Exchange Commission on Monday.
The designer rental service’s Chief Operating Officer and President Anushka Salinas resigned effective Jan. 31 “in light of the Restructuring Plan,” and will stay with the company in an advisory role until Feb. 29.
Rent the Runway CEO Jennifer Hyman was appointed president and designated the company’s principal operating officer.
The restructuring plan also excludes the potential hiring of new employees or other additions to the company’s costs and expenses.
The move was designed to “focus its workforce and cost structure” toward growth and its profitability goals based on its anticipated budget for its 2024 fiscal year, according to the filing.
A Rent the Runway spokesperson said the company’s new structure is intended to help the business achieve free cash flow and breakeven in its 2024 fiscal year.
Rent the Runway expects to incur $3 million to $4 million in charges due to the plan in the fourth quarter of its fiscal year, per the filing.
Of these charges, $2 million to $3 million will come from employee severance and related costs. About $1 million of the charges are expected to include a non-cash impairment charge of company assets.
“The company has worked over the past several years to shore up critical aspects of the customer journey to propel growth in 2024 and beyond, and is now focused on investing more into areas of the business that reignite the growth funnel, including marketing, consumer product, customer experience and more, enabling RTR to capture more of the large and growing rental subscription market,” the spokesperson said in an email to sister publication Fashion Dive.
Also Read: A US Company Now Declares An Unexpected Bankruptcy
Other Economy News Today
A massive chain now shutters stores due to theft and rising threats to its staff according to several retailer news reports.
Walgreens has been forced to close a major location ten days earlier than expected due to the increase in theft.
“Unfortunately, Walgreens on Teutonia and Capitol Dr will be closing sooner than previously scheduled,” Milwaukee’s District 1 Alderwoman Andrea Pratt shared in a post on community networking platform Nextdoor.
The store was originally meant to close on January 15 but instead shut its doors for good on Friday, January 5.
“Employees have been threatened and theft has ramped up, so they have decided to close effective tomorrow for employees’ safety,” Pratt continued.
The location is the third in Milwaukee to close since October.
Older citizens have shared their frustrations as the next closest Walgreens is a 40-minute walk from what once was the Capitol and Teutonia location.
Duane Gordon said he is worried about how he will get his medication.
“Most of us don’t have transportation to get to the Walgreens down on 76th Street and the other ones,” he told local NBC affiliate TMJ4.
“This one is essential. Walgreens, they’re making a bad choice.”
Another frustrated customer, Jessie McAttee, also relied on that Walgreens location for medication.
McAttee said she had been recently diagnosed with glaucoma and cataracts, so she “doesn’t see very well.”
“I come here and get my medicine, my heart medicine, my asthma medicine, so I really don’t know. I got to make plans. I said maybe I should try Pick ‘n Save,” she told TMJ4.
A Walgreens spokesperson told TMJ4 that they take several factors into account before closing a store, such as the local market and consumer behavior.
But Donnie Kelly, a frequent shopper at Walgreens, believed retail theft to be the main factor in the company’s latest location closure.
“People steal every day in Walgreens. They just take stuff and walk out,” he told the outlet.
According to the Milwaukee Police Department’s calls for service statistics, as shared by TMJ4, officers have responded to 59 complaints at this store alone since the start of 2023 for business checks, shoplifting, and thefts.
Also Read: Wells Fargo is Now Freezing Bank Accounts in New Scandal
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