Instead, COVID-19 hit and now both Lord & Taylor and Le Tote are in Chapter 11 bankruptcy proceedings. Le Tote acquired the venerable department store Lord & Taylor in 2019 in an effort to revive one of the US’s oldest stores. Le Tote recently filed for bankruptcy due to its subscriptions sharply declining during the COVID-19 pandemic. Rent the Runway isn’t the only rental business suffering. The future of clothing rental companies remains unclear Company president Anushka Salinas said some revenue has returned as cities and states have reopened over the summer.ĭuring the pandemic, Rent the Runway’s job listings took a steep decline, down by 83% since January.Īpp Store Ratings for Rent the Runway show that RTR is still growing, but the rate is slowing. Rent the Runway laid off its entire retail staff and cut its costs by 51%. The company saw its revenue completely disappear at the beginning of the pandemic, as customers adhered to shelter-in-place orders. RTR is also adding more return drop-off boxes with its retail partners, including Nordstrom. In August 2020, the company announced that it would be converting its New York City store into a drop-off center. However, Hyman and Fleiss found that more than 90% of visitors to Rent the Runway stores stopped by just to pick up or return items they’d rented. The stores allowed women to try on dresses before renting them. RTR's retail stores were supposed to provide a way for new customers to discover Rent the Runway. The COVID-19 pandemic has mostly halted parties and events, so Rent the Runway’s cache of thousands of designer dresses aren't flying out of the warehouse like they did just six months ago. More recently, the company got into athleisure. Navigating COVID-19 with curbside service and a pivot to athleisureĪ few years ago, Rent the Runway branched out into the teen and college market. How long should a rental timeline be? How fast should the turnaround time on an order be? Which company should they use for shipping? Most people are renting formal wear and party dresses for Friday and Saturday night, so Rent the Runway had to make sure they got those weekend outfits back quickly enough to ensure they’d be available for another customer to rent the following weekend. Then came the number crunching and analytics. One truly innovative thing Rent the Runway has done is put together a fit guide so that women can figure out which styles and shapes will work on them.Īll of that was relatively easy for Harvard MBA graduates and founders Hyman and Fleiss to figure out.
RTR also occasionally features up and coming new designers with exclusive collections to help them get their names out in the world. In exchange, Rent the Runway is given wholesale pricing, full-size runs of 0 to 12, and discount for larger quantities.
The designers also receive feedback on the fit (or lack thereof) of their dresses. This has the added advantage of allowing designers to see what’s popular in terms of color, style, and fabric. Rather than buying designer dresses to stock its warehouse, Rent the Runway decided to partner with designers. By 2016, RTR had more than six million customers, 400 designers offered on their site, and nearly 1000 employees. (Recently, news broke that Rent the Runway would not be reopening their five retail stores after the COVID-19 pandemic abates.) In just four years of business, Rent the Runway went from no subscribers to 3.5 million users. Launched as an e-commerce company, RTR opened a number of brick-and-mortar stores in major cities including New York City, Los Angeles, San Francisco, Chicago, and Washington, D.C. The two met in grad school at Harvard’s Business School and got together regularly to talk about ideas. Rent the Runway was founded by Jennifer Hyman and Jennifer Fleiss in November 2009. Now, women can rent the dress as well as the handbag, shoes, and jewelry for a fraction of the retail cost.įrom Harvard Business School to e-commerce innovation
M en have been able to rent tuxedos and other formal wear for eons. RTR does all the cleaning of the garment and no one in your circle of friends needs to know that you don’t actually own that fabulous $700 designer dress. Rent the Runway is a pretty brilliant concept. Members can rent the outfit of their dreams for an event, hold onto it for a number of days, and then send back in a pre-paid envelope.
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