“Rent the Runway” launched in 2009 started as an online store and moved into the brick and mortar business, expanding its locations in New York City, Chicago, and more. It is a platform that allows users to rent dresses from casual to party wear collections. The subscription-based company offers a hassle-free solution to have the best outfits in the wardrobe on a rental basis.
The company’s sales slowed during the pandemic; however, since the US economy is stabilizing now and customer spending bounced back, there was a swift spike in the sales with 92% active subscribers. Hyman said the chief executive officer said the customer traction is expected to soar above the pre-pandemic levels.
The company that offered only rental services will soon allow the customers to buy the used designer clothes. It aims to expand the services and build more feasibility options for the customers through a new business model that will not require membership. Earlier, the paid users were only allowed to shop designer clothes at a discounted rate.
The global data represents the resale marketplace in the US is estimated to be over $33 billion by the end of 2021 and will reach $64 billion by 2021. The resale market has strong players like Poshmark, The RealReal ThredUp, and Etsy had recently acquired the secondhand fashion app Depop for $1.62 billion.
The resale markets offer a higher value proposition; most Americans look for ways to get a wardrobe makeover. The company has witnessed exceptional growth in the membership in second-and third-tier markets — including, Charleston Tennessee, Nashville, Charlotte, South Carolina. Also, the smaller towns like Chapel Hill, North Carolina, have shown a 50% more increase in membership.
The e-commerce platform made yearly revenue of more than $100 million by growing the rental business model into haute couture and recently reached a valuation of $800 million. Additionally, it is planning for an IPO and started interviewing banks.
In a recent survey, 90 % of the customers said they are likely to buy secondhand clothes from Rent the Runway. It assures the company that there is a high possibility to engage with customers through the platform as it offers diverse brands and quality of assortment.