Rent the Runway

Rent the Runway is an online service that provides designer dress and accessory rentals. It was started by Jennifer Hyman and Jennifer Fleiss, who 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., San Francisco, and Los Angeles.^[1]

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.^[2] They considered the concept would be part of the "access economy" along with companies like Netflix and Spotify, which favor access over ownership.^[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, the firm has over 6 million customers, 975 employees, and over 400 designer partners.^[4]

In 2015, the company suffered negative press after the departure of several executives such as CTO Camille Fournier and Linda Honan (now of BBDO).^[5][6] However, it was reported to have a positive bounce back by the end of 2016 with a Series E venture investment from Fidelity Investments and the launch of new physical retail shops.^[7][8]

Business model

Customers can rent one of the firm's designer clothing for a 4- or 8-day period for as low as 10% of the retail price through their traditional platform, RTR Reserve. 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 for an additional $32.50. . Rental prices include the dry cleaning and care of the garments.

In March of 2016 the company launched Unlimited, the first fashion subscription service to give women access to designer clothes and accessories for a flat monthly fee^[9]. Its customers select 4 pieces on the site and can keep each item for as long as they want or swap them out for new selections. The subscription costs $159 per month and shipping, dry cleaning, and insurance are included. In October 2017, the company announced a new, lower-priced tier of membership called RTR Update^[10]. Customers select 4 pieces and keep them for a month. At the end of each month, they can select four new items and return their previous items.

The company also rents accessories, including jewelry and handbags, and sells “essentials,” including lingerie, tights, shapewear, and cosmetics.

Rent the Runway has physical locations in New York City, Washington, D.C., Chicago, San Francisco, and Los Angeles^[11]. Customers can visit any of Rent the Runway’s five stores, work with a personal stylist, and either take items directly with them or book dresses and accessories for future events.

The company has the biggest dry cleaning warehouse in the world, processing 2,000 items per hour.^[12]

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.^[13] In 2013, the firm was named one of the 50 companies disrupting the status-quo by CNBC,^[14] one of the 10 most innovative fashion companies by Fast Company in 2011,^[15] and one of the 50 best websites of 2010 by TIME magazine.^[16]

The firm and its CEO and Co-Founder Jennifer Hyman was named one of the “12 Most Disruptive Names in Business” in 2013 by Forbes^[17] and she was included on Fortune’s “Trailblazers” list of individuals changing the face of business in 2013.^[18] Both Hyman and co-founder Jennifer Fleiss have been named Inc. Magazine’s “Top 30 Under 30,” Fortune’s “40 Under 40,”^[19] Fast Company’s “Most Influential Women in Technology,”^[20] and Fashion Group International’s 14th annual Rising Stars in Retail, ^[21] by Forbes in 2016 as "Women Entrepreneurs to Watch" ^[22], and as "The Creatives" on the 2016 Upstart 100 ^[23]

References