Rent the Runway is an American

e-commerce E-commerce (electronic commerce) refers to commercial activities including the electronic buying or selling products and services which are conducted on online platforms or over the Internet. E-commerce draws on technologies such as mobile co ...

platform that allows users to rent, subscribe, or buy designer apparel and accessories. It was founded in November 2009 by Jennifer Hyman and Jennifer Fleiss and is based in

New York City New York, often called New York City (NYC), is the most populous city in the United States, located at the southern tip of New York State on one of the world's largest natural harbors. The city comprises five boroughs, each coextensive w ...

History

In 2007, Hyman and Fleiss met as sectionmates at

Harvard Business School Harvard Business School (HBS) is the graduate school, graduate business school of Harvard University, a Private university, private Ivy League research university. Located in Allston, Massachusetts, HBS owns Harvard Business Publishing, which p ...

. They regularly met up to discuss entrepreneurial ideas, one of which was Rent the Runway.Black, Tiffany
“Jennifer Hyman and Jenny Fleiss, Founders of Rent the Runway”
''Inc Magazine'', July 19, 2010 After seeing her sister overspend on an expensive new dress for a wedding, Hyman had the idea of offering dress rentals for women for special events. Long term, her plan was to offer women unlimited access to a designer closet they could rent from on-demand. Early on, Hyman and Fleiss pitched the idea to designer Diane von Fürstenberg as a rental service for her brand's website. She was initially uninterested, and suggested that instead they create their own multi-brand retail site. Hyman and Fleiss took her advice, and Fürstenberg signed on as one of the company's first designer partners. A November 2009 article in ''

The New York Times ''The New York Times'' (''NYT'') is an American daily newspaper based in New York City. ''The New York Times'' covers domestic, national, and international news, and publishes opinion pieces, investigative reports, and reviews. As one of ...

'' helped bring publicity to the company shortly after its launch. In 2016, the company began offering everyday clothing through a subscription model. The company has received over $400 million in

venture capital Venture capital (VC) is a form of private equity financing provided by firms or funds to start-up company, startup, early-stage, and emerging companies, that have been deemed to have high growth potential or that have demonstrated high growth in ...

from investors including

Fidelity Fidelity is the quality of faithfulness or loyalty. Its original meaning regarded duty in a broader sense than the related concept of '' fealty''. Both derive from the Latin word , meaning "faithful or loyal". In the City of London financial m ...

Franklin Templeton Franklin Resources, Inc. is an American multinational investment management holding company that, together with its subsidiaries, is referred to as Franklin Templeton; it is a global investment firm founded in New York City in 1947 as Franklin ...

, TCV, Bain Capital Ventures,

Highland Capital Partners Highland Capital Partners is a global venture capital firm with offices in Boston, Silicon Valley, and San Francisco. Highland has raised over $4 billion in committed capital and invested in more than 280 companies, with 47 IPOs and 134 acqui ...

American Express American Express Company or Amex is an American bank holding company and multinational financial services corporation that specializes in payment card industry, payment cards. It is headquartered at 200 Vesey Street, also known as American Expr ...

, and T. Rowe Capital.Rao, Lena
"AmEx Backs The Netflix For Designer Clothes, Rent The Runway"
"TechCrunch", March 11, 2013 In 2015, the company suffered negative press after the departure of several executives such as CTO Camille Fournier and Linda Honan (now of

BBDO BBDO is a worldwide advertising agency network, with its headquarters in New York City. The agency originated in 1891 with the George Batten Company, and in 1928, through a merger with Barton, Durstine & Osborn (BDO), the agency became Batten, B ...

).Roberts, Daniel
"Exclusive: What’s behind the exodus from Rent the Runway?"
"Fortune", Nov 17, 2015Kosoff, Maya
"Why executives are fleeing $500 million startup Rent the Runway"
"Business Insider", November 17, 2015 However, it was reported to have a positive bounce back by the end of 2016 with a Series E venture investment from

Fidelity Investments Fidelity Investments, formerly known as Fidelity Management & Research (FMR), owned by FMR LLC and headquartered in Boston, Massachusetts, provides financial services. Established in 1946, the company is one of the largest asset managers in the ...

and the launch of new physical retail shops.O'Connor, Clare
"Rent The Runway Raises $60M In Funding As It Rolls Out Retail Stores"
Forbes", December 28, 2016 In 2017, Fleiss left the company to co-found Jetblack, a concierge shopping service. Fleiss remained on the board and Hyman remained as CEO. In March 2019, Rent the Runway received a new round of financing that increased its valuation to the

unicorn The unicorn is a legendary creature that has been described since Classical antiquity, antiquity as a beast with a single large, pointed, spiraling horn (anatomy), horn projecting from its forehead. In European literature and art, the unico ...

level of $1 billion. In September 2023, Rent The Runway began to decline, as sales were failing to meet soaring consumer demand after a disappointing quarter. In October 2023, CreditRiskMonitor reported that Rent the Runway was nearing a potential

Chapter 11 bankruptcy Chapter 11 of the United States Bankruptcy Code ( Title 11 of the United States Code) permits reorganization under the bankruptcy laws of the United States. Such reorganization, known as Chapter 11 bankruptcy, is available to every business, w ...

filing.

Business model

The company offers clothes from over 700 designers, in sizes ranging from 00 to 22. In addition to garments for events, the company also rents everyday clothing, children's clothing, ski apparel, home décor, and accessories, including jewelry and handbags. The company offers several subscription plans at varying prices, that can be customized. According to the company, as of 2019 subscriptions account for 75% of its business. Customers can also rent clothes for a 4- or 8-day period without signing up for a subscription as part of the company's Reserve program. Each rental includes a back-up size at no additional cost to ensure it fits. Customers can get a second style for an additional fee. Rental prices include the dry cleaning and care of the garments. In 2021, the company began allowing anyone to buy items secondhand from its site without a membership. Subscribers have had the option to buy items they rented since 2016. Rent the Runway had physical locations in

Washington, D.C. Washington, D.C., formally the District of Columbia and commonly known as Washington or D.C., is the capital city and federal district of the United States. The city is on the Potomac River, across from Virginia, and shares land borders with ...

Chicago Chicago is the List of municipalities in Illinois, most populous city in the U.S. state of Illinois and in the Midwestern United States. With a population of 2,746,388, as of the 2020 United States census, 2020 census, it is the List of Unite ...

San Francisco San Francisco, officially the City and County of San Francisco, is a commercial, Financial District, San Francisco, financial, and Culture of San Francisco, cultural center of Northern California. With a population of 827,526 residents as of ...

, and

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, where customers could work with a personal stylist, and either take items directly with them or book dresses and accessories for future events. In August 2020, the company announced it would be closing all five of its retail locations, in order to focus on digital subscriptions, and would be adding more drop box locations. According to the company, it has the biggest

dry cleaning Dry cleaning is any cleaning process for clothing and textiles using a solvent other than water. Clothes are instead soaked in a water-free liquid solvent (usually non-polar, as opposed to water which is a Solvent#Solvent classifications, polar ...

operation in the United States and possibly the world, processing 2,000 items per hour (as of 2018). The company has distribution warehouses in

Secaucus, New Jersey Secaucus ( ) is a Town (New Jersey), town in Hudson County, New Jersey, Hudson County, in the U.S. state of New Jersey. As of the 2020 United States census, the town's population was 22,181, an increase of 5,917 (+36.4%) from the 2010 United St ...

, and

Arlington, Texas Arlington is a city in Tarrant County, Texas, Tarrant County, Texas, United States. It is part of the Mid-Cities region of the Dallas–Fort Worth metroplex, Dallas–Fort Worth–Arlington metropolitan statistical area, and is a principal c ...

. In September 2019, Rent the Runway experienced an 11-day operational glitch and temporarily stopped accepting new customers. The company resumed regular operations on October 15, 2019, after implementing system upgrades.

Awards and honors

Rent the Runway was named on

CNBC CNBC is an American List of business news channels, business news channel owned by the NBCUniversal News Group, a unit of Comcast's NBCUniversal. The network broadcasts live business news and analysis programming during the morning, Day ...

's Disruptor 50 list in 2013, 2014, 2015, 2018 and 2019. The company was named one of Fast Company's Most Innovative Companies in 2011, 2015, 2018 and 2019. In 2018, ''

Fast Company ''Fast Company'' is an American business magazine published monthly in print and online, focusing on technology, business, and design. It releases six print issues annually. History ''Fast Company'' was founded in November 1995 by Alan Webb ...

'' recognized RTR Unlimited as a World Changing Idea; in 2014 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; and in 2010, ''

Time Time is the continuous progression of existence that occurs in an apparently irreversible process, irreversible succession from the past, through the present, and into the future. It is a component quantity of various measurements used to sequ ...

'' magazine named it one of the 50 best websites of the year. In 2019, ''

'' recognized Hyman as one of their 100 Most Influential People. The firm and Hyman were named one of the 12 Most Disruptive Names in Business in 2013 by Forbes, and Hyman was included on Fortune’s Trailblazers list of individuals changing the face of business in 2013. Both Hyman and co-founder Fleiss have been named to Inc. Magazine’s “30 Under 30,” Fortune’s “40 Under 40,” Fast Company’s “Most Influential Women in Technology,” Fashion Group International’s 14th annual Rising Stars in Retail,

Forbes ''Forbes'' () is an American business magazine founded by B. C. Forbes in 1917. It has been owned by the Hong Kong–based investment group Integrated Whale Media Investments since 2014. Its chairman and editor-in-chief is Steve Forbes. The co ...

' "Women Entrepreneurs to Watch", and '' The Business Journal'' 2016 Upstart 100 Class of Creatives.

References

{{reflist Online retailers of the United States American companies established in 2009 Retail companies established in 2009 Internet properties established in 2009 Dry cleaning Clothing rental companies Subscription services 2021 initial public offerings Companies listed on the Nasdaq Publicly traded companies based in New York City