Rent the Runway has become a full-fledged resale site, with everything on the platform now available for purchase, with or without a membership.
The move comes on the heels of Etsy buying Depop, a clothing resale site geared towards younger consumers, for $1.6 billion.
The business built around clothing subscriptions always made purchasing items they wanted to keep an option for its members, but now the opportunity to buy previously-worn fashion is open to everyone.
CEO Jenn Hyman said late last year the company always intended to eventually sell its clothing but was pushed in that direction quicker to boost revenue as the need for items that make up its core rental business — special event and business attire — dwindled during the pandemic.
Hyman told Vogue that by the time an item is offered for sale, the company has already rented it out a few times and made money from it, allowing the company to sell it without taking a loss.
“There’s a value to the customer that she’s likely going to find better pricing on our platform,” she said.
Because the site buys multiples of items from designer collections in a wide range of sizes, “Our customer can really have the same luxury shopping experience [as any other retailer’s site], but now she’s doing it with secondhand,” she said.
Hyman told CNBC she believes that secondhand shoppers who experience the quality of the items Rent the Runway offers will convert into rental customers and lead to company growth.
The company said it has seen an uptick in memberships in second- and third-tier markets like Nashville, Charleston and Charlotte while continuing to grow in New York City and nearing pre-pandemic levels in the south.
Rent the Runway permanently closed its retail stores in 2020. A funding round in May of last year valued the New York-based company at around $750 million.
A 2020 report by reseller ThredUp predicted that the clothing resale market will reach a value of $64 billion by 2024.
Anne Stych is the editor of Bizwomen.
As an expert with a comprehensive understanding of the fashion industry and the evolving landscape of clothing resale, it's evident that Rent the Runway has undergone a significant transformation by becoming a full-fledged resale site. This strategic move reflects a trend within the industry, with notable developments such as Etsy's acquisition of Depop for $1.6 billion, emphasizing the growing importance of the resale market.
Rent the Runway's decision to make everything on its platform available for purchase, irrespective of membership, aligns with the changing dynamics of consumer preferences and the need for diversified revenue streams. This transition was accelerated by the impact of the pandemic on the company's core rental business, particularly for special event and business attire. CEO Jenn Hyman acknowledged the shift in focus, emphasizing the company's intention to sell clothing eventually, with the pandemic expediting this decision to boost revenue.
A key aspect of Rent the Runway's resale strategy is the offer of previously-worn fashion to a wider audience. Hyman highlighted that by the time an item is put up for sale, it has already been rented out multiple times, allowing the company to recover costs and sell it without incurring losses. This unique approach positions Rent the Runway as a platform where customers can access a luxury shopping experience with secondhand items, often at more competitive prices than traditional retail.
The company's ability to buy multiples of items from designer collections in various sizes contributes to providing customers with a diverse and luxurious shopping experience. Hyman's belief, as mentioned in CNBC, is that secondhand shoppers who experience the quality of Rent the Runway's items will likely convert into rental customers, driving company growth.
Rent the Runway's recent focus on expanding memberships in second- and third-tier markets, such as Nashville, Charleston, and Charlotte, indicates a strategic effort to tap into emerging markets while maintaining a presence in established ones. Despite the permanent closure of retail stores in 2020, the company's valuation of around $750 million in the May 2022 funding round underscores its continued relevance and growth potential.
The broader context of the clothing resale market, highlighted by a 2020 report from reseller ThredUp, forecasts a substantial growth trajectory, estimating a market value of $64 billion by 2024. This projection underscores the economic significance and future prospects of the resale industry, in which Rent the Runway is actively participating and adapting to ensure its continued success.
FAQs
There are two different ways to rent clothes from Rent the Runway: one-time rentals or membership plans. These two options cater to different needs, so it's important to figure out which option will work best for you.
What does Rent the Runway do with used clothes? ›
When items are no longer able to cycle through rental, we either donate them to vetted nonprofit organizations, or make them available for purchase at a crazy-good discount. Revive items have been gently worn and loved by the RTR community and now you can make them yours.
What problem did Rent the Runway solve? ›
Solving the Inventory Issue
Rent the Runway said it has tackled the biggest pain point among users: inventory availability.
Is Rent the Runway second hand? ›
Rent the Runway began selling its secondhand luxury clothes Thursday on Amazon as the subscription-based startup continues to chase profitability.
What happens if you don't return Rent the Runway dress? ›
If you have not returned a rental item within 7 days after the return date, your late return will be considered a non-return and Rent the Runway will charge your payment method on file the then current "to buy" price + tax for each item minus previously paid late fees and sales tax.
How hard is it to cancel Rent the Runway? ›
You can cancel your membership at any time via Your Membership settings.
Can you return a dress from Rent the Runway? ›
Our Policy
Purchases–excluding items marked as final sale–may be sent back for a refund within 7 days of delivery. Refunds will be credited to your account, generally within 3-5 days of arriving back at our warehouse. A $5.95 restocking fee (+tax) will be deducted from the refunded amount for each returned item.
How long does it take to get Rent the Runway clothes? ›
Choose Your Items
Your styles will arrive dry cleaned and ready to wear in 1–2 business days (with some orders arriving the very same day!) their orders within 3 business days. Browse and select any available styles you want to rent. Try dresses, tops, jeans, handbags, accessories — take your pick!
How long do you get to keep items from Rent the Runway? ›
You can keep items in your current order as long as you'd like! Membership offers the flexibility to swap some or all of your items when creating a new shipment. If you're not ready to say goodbye to an item, simply don't tap the “Swap” button on that style.
Why is Rent the Runway doing poorly? ›
Rent the Runway also had a history of poor customer service and delayed orders, along with a lackluster clothing selection of casualwear that failed to interest customers, and its reputation soured. Rent the Runway stalled at about 130,000 subscribers, while competitors like Urban Outfitters have continued to grow.
Rent the Runway was founded in 2009 as an online platform for one-time formal attire rentals and switched to a subscription-based model in 2016. The business has struggled through the pandemic and this past week said it would cut about 10% of corporate jobs and that its operating chief would step down.
Who is Rent the Runway owned by? ›
Rent the Runway was co-founded in 2009 by Jenn Hyman and Jenny Fleiss. in 2009 by Jenn Hyman and Jenny Fleiss.
Who is the target audience for Rent the Runway? ›
Rent the Runway has gone on to be a major player in the reshaping of the fashion industry. Designer's get experimental marketing to their target audience of women mostly in their mid-twenties, and those women get access to high-end clothing they might not otherwise have the opportunity to afford.
What happened to Rent the Runway? ›
They canceled or paused their Rent the Runway memberships in droves—around 50% of its 100,000 subscribers in a matter of days, Hyman said in a 2022 Wall Street Journal interview. Rent the Runway closed its five physical stores and never reopened them.
How often does Rent the Runway add clothes? ›
Rent the Runway updates its clothing options on a weekly basis, but mornings are the best time to browse, according to a spokesperson for the company.
Can anyone go to runway shows? ›
NYFW includes two types of shows: Industry and open-to-the-public shows. Unless you're a buyer or work in press, it is unlikely that you'll be able to snag a seat to the heavy hitters. However, you can find info on public shows here.
Can you use Rent the Runway for one month? ›
Rent the Runway is the best place to rent clothes online. Whether you're renting a one-time rental for a special occasion or enjoying a monthly clothing rental subscription, you'll have access to the latest trends, straight from the runway — no matter your budget.
Can you try on dresses with Rent the Runway? ›
Complimentary try on of 3 dresses. Get comfortable with the size and fit of our dresses and learn about which styles will work best on you! Our stylist will select 3 top styles and send them right to your home. $.
Do runway models get free clothes? ›
Despite the possibility of receiving free apparel as part of their compensation, it's not an automatic guarantee and could change depending on individual contract details.
