Rent the Runway

Rent the Runway is an online service that provides designer dress and accessory rentals. Rent the Runway was started by Jennifer Hyman and Jennifer Fleiss, who met at Harvard Business School and launched the company in November 2009. Initially a purely e-commerce company, it later opened brick-and-mortar retail locations in New York City, Chicago, Washington, D.C., Los Angeles and Las Vegas.^[1] Rent the Runway now offers over 100,000 dresses and 25,000 accessories from over 400 designer partners, including Badgley Mischka, Derek Lam, Jason Wu, Naeem Kahn and Giambattista Valli.

History

In 2008, Hyman and Fleiss met as sectionmates at Harvard Business School. They regularly met up to discuss entrepreneurial ideas, one of which was Rent the Runway. Hyman thought of the idea after witnessing her sister spend thousands of dollars on a new designer dress to wear to a wedding, despite already owning several designer dresses, because she did not want to be seen in a dress she had already worn, especially after photos of her wearing those dresses had been posted to social media.^[2] Hyman and Fleiss knew the concept had the potential to contribute to the “access economy” along with companies like Netflix and Spotify, which favor access over ownership, and decided to test it out with consumers. They pitched the idea to designers and potential investors without writing a business plan, instead deciding that testing and iterating on their concept was more important than a formal plan.^[2] They launched www.renttherunway.com in November 2009.

The company has received approximately $126 million in venture capital from Bain Capital Ventures, Highland Capital, Kleiner Perkins Caufield & Byers, Condé Nast’s parent company Advance Publications, American Express, and Novel TMT Ventures.^[3] As of October 2016, Rent the Runway has over 6 million members, 975 employees, and over 400 designer partners.^[4]

Rent the Runway is an e-commerce company that gives women access to designer fashion through apparel and accessory rentals. While Rent the Runway sources its inventory directly from designers just like traditional retailers, it has transformed the fashion industry by then offering access to the same designer apparel and accessories for 90% off retail with its rental model.

Business model

Customers can rent one of Rent the Runway’s designer dresses and accessories for a 4- or 8-day period for 10% of the retail price. Rent the Runway carries apparel in sizes 0 to 22, depending on the designer. Each dress rental includes a back-up size at no additional cost to ensure fit. Customers can get a second dress style with their order for an additional $32.50. Rent the Runway provides customers with a pre-paid, pre-addressed package to return the dress, and offers a $5 insurance fee to protect against accidents. Rental prices include the dry cleaning and care of the garments.

In March of 2016 the company launched Unlimited, the first subscription to fashion that gives women access to designer clothes and accessories for a flat monthly fee. Through Unlimited customers select 3 pieces on the Rent the Runway site and can keep each item for as long as they want or swap any or all of them out for new selections. The subscription costs $139 per month and shipping, dry cleaning, and insurance are included.

Rent the Runway also rents accessories, including jewelry and handbags, and sells “essentials,” including lingerie, tights, shapewear, and cosmetics.

Rent the Runway has two physical locations in New York, and one each in Georgetown, Chicago, Las Vegas and Los Angeles. Customers can visit any of Rent the Runway’s six stores, work with a personal stylist, and either take items directly with them or book dresses and accessories for future events.

Rent the Runway’s stylists are also available to provide answers to customers’ styling, fit and logistics questions via phone, email and live chat.

Rent the Runway’s website includes multiple consumer reviews of each dress. These reviews help overcome consumers fit concerns when shopping online. Judging by the content of these reviews, it seems that the most important criteria for RTR reviewers are: (a) fit, (b) garment style and design elements, (c) feedback received while wearing the item, and (d) appropriateness.

In 2015 The Rent the Runway Foundation (http://projectentrepreneur.org/) in partnership with UBS launched Project Entrepreneur. Project Entrepreneur supports women entrepreneurs by providing access to the tools, training and networks needed to build scalable, economically impactful companies. The multi-faceted national initiative includes a venture competition, 5-week accelerator program, robust digital hub, and multi-city events.

Awards and honors

The New York State Society for Human Resource Management honored Rent the Runway as one of the best companies to work for in New York State in 2014.^[5] In 2013, Rent the Runway was named one of the 50 companies disrupting the status-quo by CNBC,^[6] one of the 10 most innovative fashion companies by Fast Company in 2011,^[7] and one of the 50 best websites of 2010 by TIME magazine.^[8] T

Rent the Runway CEO and Co-Founder Jennifer Hyman was named one of the “12 Most Disruptive Names in Business” in 2013 by Forbes^[9] and was included on Fortune’s “Trailblazers” list of individuals changing the face of business in 2013.^[10] Both Hyman and co-founder Jennifer Fleiss have been named Inc. Magazine’s “Top 30 Under 30,” Fortune’s “40 Under 40,”^[11] Fast Company’s “Most Influential Women in Technology,”^[12] and Fashion Group International’s 14th annual Rising Stars in Retail.^[13]

Rent the Runway Founders Jenn Hyman and Jenny Fleiss were recognized by Forbes in 2016 as "Women Entrepreneurs to Watch" (http://www.forbes.com/sites/katiasavchuk/2016/06/15/serena-williams-katy-perry-women-entrepreneurs-to-watch-self-made/#7502c8fb255d) as well as "The Creatives" on the 2016 Upstart 100 (http://www.bizjournals.com/bizjournals/news/2016/08/18/the-creatives-upstart-100-celebrates-artful.html#g7)

References