Undaunted, Hyman - who was traveling and unavailable for further comment - is looking ahead, and potentially beyond fashion. "I think that there's even more demand than ever to have those experiences." "Because of the fact that we've been cooped up for the last two years, we've not been attending holiday parties and weddings and dinners with our friends and vacations," Hyman told CNBC in the August interview. Its valuation reportedly took a hit during this period too, with a fundraising during the pandemic lowering the start-up below its previous $1 billion valuation and so-called unicorn status.īut the company bounced back, and Rent the Runway completed an IPO in October 2021, following a trend of stylish, direct-to-consumer brands - and fellow Disruptor 50 companies - such as Warby Parker, which went public in the stock offering boom of 2021. After it closed down all retail locations and laid off all retail staff members in March 2020 – citing a need to "dramatically reassess" its business model – Rent the Runway announced in August 2020 that it did not plan to reopen any of its stores in an effort to focus on online innovations and adding more drop boxes where customers could return clothes. It opened its first retail store location in New York City in October 2014 and eventually established four additional stores in major cities across the U.S. Rent the Runway also had to backtrack on its bricks-and-mortar expansion. It began an expansion into the resale market, allowing customers to shop its selection and purchase gently used items without having a membership. It revamped its membership plans and did away with its unlimited subscription option. It also rewrote the terms with its suppliers to pivot to a revenue-sharing consignment model, different from its initial wholesale model that required a capital spend upfront without a guaranteed payback. Rent the Runway slashed costs at the onset of the pandemic. In 2020, its active subscriber count fell almost 60% to about 55,000 from about 133,000 the prior year, and it experienced a net loss of $171.1 million compared to its $153.9 million loss in 2019. 5 in 2019.īut with a heavy reliance on subscribers renting outfits largely to wear at in-person events and gatherings, the Covid-19 pandemic hit the company hard and it had to make many hard decisions to keep the business going. It also was named to the CNBC Disruptor 50 list five times, most recently ranked No. In its first decade of existence, Rent the Runway says it reached more than 11 million members. The company estimates that with their eight-item monthly plan, customers have the opportunity to sport more than $4,000 worth of designer clothing every month for less than $18 per item. Customers can rent items for as long as they'd like and have the option to purchase any pieces they love. With more than 800 brand partnerships, sizes ranging from 00-22, and three main subscription plans, Rent the Runway's business model of helping women to stay up-to-date with constantly evolving fashion trends - without breaking the bank or repeating their outfits - found early success. "Providing women with access … to an unlimited closet and the ability to wear whatever she wants without having to own it, that was really the underpinning of Rent the Runway – this idea that actually there was a better way to have variety in your wardrobe than just buying and throwing away," Hyman said in an interview with CNBC's Julia Boorstin in August. That's why she, along with co-founder Jenny Fleiss, started the fashion rental and subscription business Rent the Runway in 2009 – a service the company has coined a "closet in the cloud." Personal Loans for 670 Credit Score or Lower Personal Loans for 580 Credit Score or Lower Best Debt Consolidation Loans for Bad Credit
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