Rent the Runway

Rent the Runway is a New York–based e-commerce company that lets consumers rent designer apparel and accessories either as one-time reservations for specific events or through a recurring clothing subscription. Subscribers select five items per shipment from an assortment described as thousands of styles from 750+ designer brands, covering dresses, tops, sweaters, jeans, pants, skirts, shorts, jumpsuits, jackets and coats, matching sets, handbags, sunglasses, jewelry and maternity styles. Items ship via UPS, typically arriving in one to three business days, with same-day delivery in qualifying NYC zip codes and complimentary home pickup for returns in 34 cities. Cleaning, pressing and minor-damage coverage are included; members may keep items as long as their membership is active or buy them at a discount.

The company markets three subscription tiers differing in shipments per month (1, 2 or 4 shipments, five items each) at $129, $164 and $275 per month respectively, each with a discounted first month ($78, $99, $165). It also sells one-time rentals ("Reserve") priced per item — listed dresses range from roughly $34 to $130 against original retail values from about $99 to nearly $1,000 — and resells inventory to members. Subscription access is split into a Full Subscription Closet (items with retail value up to $3,000) and a Limited Subscription Closet (curated everyday items up to $350 retail, excluding formalwear and select designers); a separate "Rent the Runway Vault" is reserved for one-time rentals only.

Per a third-party startup database, the company was founded in 2009 by Jennifer Hyman (CEO) and Jennifer "Jenny" Fleiss, is headquartered in New York City, is listed as publicly traded, and has raised $655.4M across 11 funding rounds. The same source lists an employee figure of 10,000+ and one recorded investment, in EdSights (2020).

Founding story

According to the company, the idea originated in November 2008 when Jenn Hyman, then a Harvard Business School student, saw her sister Becky buy a $2,000 designer dress for a wedding on credit, prompting the question of whether designer items could be rented instead. Hyman shared the concept with classmate Jenny Fleiss. In December 2008 the pair cold-emailed designer Diane von Furstenberg, who met with them and, though initially skeptical, offered business advice. In April 2009 they ran a pop-up dress rental shop on Harvard's campus with Becky, and the Rent the Runway website launched nationwide on 10 November 2009.

Business model

Rent the Runway generates revenue from recurring monthly clothing subscriptions, from one-time item rentals for events, and from sales of apparel to customers (including discounted purchases of items members already have at home and members-only sample sales). Cleaning, shipping in both directions and coverage for minor damage are bundled into the fee, while significant damage, loss or theft is charged at the item's current purchase price plus tax.

Tiered monthly subscription fees ($129, $164 and $275 per month for 1, 2 or 4 five-item shipments, with discounted first months of $78, $99 and $165), per-item rental fees for non-subscription reservations, and resale of garments and accessories.

Traction

The company states it has handled tens of millions of rentals over the past 15 years and cites millions of five-star reviews. It reports that members rent an average of $1,620 in retail value per shipment and offers access to 750+ brands; its catalog pages show 167 pages of products overall and 81 pages of dresses. A third-party profile lists an employee headcount of 10,000+.

Latest developments

Current site pricing shows three subscription tiers at $129, $164 and $275 per month with discounted first months, a Full versus Limited Subscription Closet structure, a Rent the Runway Vault of reserve-only styles, home pickup in 34 cities, and RTR collaboration collections. The most recent funding event recorded by the third-party database is a $125M venture round in March 2019.