Rent the Runway

Rent the Runway

Company type	Public
Industry	E-commerce, Fashion rental, Subscription services
Founded	November 2009 (2009-11)
Founder	Jennifer Hyman, Jennifer Fleiss
Headquarters	New York City , United States
Area served	United States
Key people	Jennifer Hyman (CEO)
Products	Rental, subscription, and purchase of designer clothing and accessories
Website	rentrunway.com

Rent the Runway is a U.S.-based e-commerce company specializing in the rental, subscription, and purchase of high-end designer clothing and accessories. Established in November 2009 by Jennifer Hyman and Jennifer Fleiss, its main office is situated in New York City.

History

The founders, Hyman and Fleiss, crossed paths at Harvard Business School in 2007 and conceived the business concept after Hyman noticed her sister spending excessively on a single dress for a wedding event. Their mission centered on granting women immediate access to designer wardrobes without full ownership. Initially, they pitched their idea to designer Diane von Fürstenberg, but ultimately pivoted to building a platform featuring multiple brands for clothing rentals, securing Fürstenberg as an early collaborator. The venture received notable attention following a 2009 feature in The New York Times. By 2016, Rent the Runway broadened its offerings to include everyday apparel through a subscription service.

The startup has accumulated upwards of $400 million in venture funding from prominent investors such as Fidelity Investments, Franklin Templeton, TCV, and Bain Capital Ventures. Despite leadership changes in 2015, including the departure of CTO Camille Fournier, the company recovered with Series E financing and inaugurated physical retail outlets by 2016. Fleiss left the company in 2017 to co-found Jetblack but retained a board seat; meanwhile, Hyman remains as CEO. As of March 2019, Rent the Runway reached a valuation of $1 billion, officially becoming a unicorn.

In September 2023, the company encountered operational difficulties as sales lagged behind growing customer demand. By October 2023, CreditRiskMonitor reported that Rent the Runway was nearing a potential Chapter 11 bankruptcy filing.

Business model

Rent the Runway features apparel from more than 700 designers, offering sizes ranging from 00 to 22. Its inventory encompasses formal wear, casual clothing, children's outfits, ski apparel, home furnishings, along with accessories such as jewelry and handbags. The business provides several customizable subscription plans that contributed to 75% of total revenue by 2019.

Customers may also opt for short-term rentals through the Reserve program without subscribing. These rentals include a free backup size and allow adding an extra style for an additional fee. Rental fees cover dry cleaning and maintenance services. Since 2016, subscribers have had the option to purchase rented items; in 2021, the company introduced secondhand sales available without membership requirements.

Retail stores were located in New York City, Washington, D.C., Chicago, San Francisco, and Los Angeles, offering personalized styling and immediate or scheduled rentals. However, all five physical locations were closed in August 2020 to prioritize digital subscription growth and expand drop box services.

The company operates one of the nation’s largest dry cleaning facilities, capable of processing approximately 2,000 garments per hour (as of 2018). Its distribution centers are based in Secaucus, New Jersey, and Arlington, Texas. In September 2019, Rent the Runway experienced an operational outage lasting eleven days but restored full functionality following system improvements by mid-October.

Awards and honors

Rent the Runway has repeatedly appeared on CNBC's Disruptor 50 list during the years 2013 to 2015, as well as in 2018 and 2019. Fast Company recognized the company as one of the Most Innovative Companies in 2011, 2015, 2018, and 2019. In 2018, Fast Company also honored RTR Unlimited with a World Changing Idea award. The New York State Society for Human Resource Management named Rent the Runway among the top workplaces in New York State in 2014. Furthermore, Time magazine included Rent the Runway in its list of the 50 best websites for 2010.

In 2019, Time honored founder Jennifer Hyman as one of their 100 Most Influential People. Forbes featured both Hyman and Rent the Runway in its 2013 list of the 12 Most Disruptive Names in Business. That same year, Hyman was included on Fortune’s Trailblazers list. Alongside co-founder Jennifer Fleiss, she has been recognized in Inc. Magazine’s “30 Under 30,” Fortune’s “40 Under 40,” Fast Company’s “Most Influential Women in Technology,” Fashion Group International’s Rising Stars in Retail, Forbes’ "Women Entrepreneurs to Watch," and The Business Journal’s 2016 Upstart 100 Class of Creatives.