Rent the Runway, Inc RENT shares are rising after the company adopted a new restructuring plan.
The New York-based clothing rental service plans to reduce its workforce by approximately 10%.
The restructuring is expected to be completed by the end of the fourth quarter (Q4) of fiscal 2023 and fully completed by the end of the second quarter of fiscal 2024.
Rent the Runway expects to incur charges of about $3 million - $4 million for the plan — all of which will be incurred in Q4 FY23.
These charges are expected to consist of about $2 million - $3 million of cash charges for employee severance and include a non-cash impairment charge of company assets of approximately $1 million.
The restructuring is expected to result in approximately $11 million - $13 million of annualized run rate cash savings.
In connection with the restructuring, on Jan. 8, 2024, Anushka Salinas resigned as the company’s Chief Operating Officer and President, effective Jan. 31, 2024.
Jennifer Hyman, the Chief Executive Officer, was appointed as Rent the Runway’s President and designated principal operating officer, effective on the transition date.
Price Action: RENT shares are trading higher by 16.97% at $0.66 on the last check Tuesday.
Image: Shutterstock
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