When Retail Startups Get Valued Like Tech Companies, Trouble Follows

Rent The Runway, the designer women’s fashion rental service, is private and doesn’t publish earnings but it would be surprising if it was profitable. It is valued at a cool $1 billion. Stitch Fix, the online personal styling service, makes money but its earnings are erratic. It is valued at $2 billion, over 50 times EBITDA (earnings before interest, taxes, depreciation and amortization).