Rent the Runway’s Revenues Rise as Consumers Embrace Borrowed Fashion
Rent the Runway achieved record revenue as its bargain-hunting customers sought deals on everyday fashion.
The company said its revenue for the quarter rose 31% year-over-year, while its active user base increased, with subscribers beginning to use the fashion rental and retail service for more than just special events.
Speaking during an earnings call Wednesday (Dec. 7), CEO and Co-founder Jennifer Hyman noted that three years ago, customers used their subscriptions for work and special occasions 55% of the time.
“Today, they use us for casual everyday life, 55% of the time,” Hyman said. “This means she’s renting items like denims, sweaters, winter coats, and handbags from us. Things that keep subscribers sticky in this program even when they don’t have special events.”
To keep them sticky, the company says it is investing in customer experience, Hyman told investors. For example, Rent the Runway recently wrapped work to connect its inventory data system — using 13 years of data on things like quality, reviews, style, and sizing — to its on-site search and discovery tools.
“As a result of this, we expect that we will be able to significantly expand the way our customers are able to browse our site next year,” said Hyman.
Rent the Runway launched a restructuring plan in September — a strategy that included reducing its workforce by 24% — following a quarter that saw its active subscriber base fall from about 135,000 to 124,000.
As PYMNTS noted in October — around the one-year anniversary of Rent the Runway's $1.7 billion IPO — the company was struggling at a time when other players in the fashion resale world were seeing their fortunes change for the better.
This fall saw New York City’s original luxury reseller, What Goes Around Comes Around, launch a digital storefront on Amazon, a move that instantly transforms the company’s presence from bicoastal to worldwide.
Around the same time, eCommerce fashion platform GOAT Group announced it was purchasing apparel reseller Grailed, as the two companies combined their forces amid an expected rise in secondhand luxury sales.
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