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New and secondhand Rent the Runway clothing will now be available to buy directly on Amazon, marking an expansion of the former’s core rental business model as it works to build awareness. The move also offers a win for Amazon to carry more designer fashion. Both have been working for years on these pursuits—Rent the Runway on convincing more people to rent its clothing, and Amazon on elevating its fashion offerings.
Designer pieces that have previously been rented and worn by Rent the Runway customers will be sold via a digital storefront on Amazon. This includes hundreds of styles across casual wear, workwear, “date night” apparel, seasonal essentials, and denim, from more than 35 brands such as Tory Sport, Rag & Bone, Tibi, Sita Murt, and Kate Spade New York.
Amazon customers will also be able to buy new styles from Rent the Runway’s Design Collective. These are pieces that were exclusively designed for the platform by partner brands, informed by data on fit and customer preferences, and were previously available only to rent on Rent the Runway. Partner brands whose “Collective” designs will appear on Amazon at launch include Adam Lippes, Derek Lam, Esteban Cortazar, Marina Moscone, Ronny Kobo, Jonathan Saunders, and Thakoon.
This marks the first time that people will be able to directly buy new designer items from Rent the Runway. All participating brands gave permission to be sold on Amazon via Rent the Runway, according to Rent the Runway.
Rent the Runway cofounder and CEO Jenn Hyman says this will bring brand awareness to the 14-year-old rental fashion company: “There is no site in this country that has higher awareness than Amazon. Rent the Runway is a service that has something for everyone, and we feel that the customer base for us should be broad and diverse.” She added that the business has historically spent less than 10% of revenue on marketing and leans heavily on word-of-mouth referrals.
This will also increase the amount of designer fashion sold on Amazon, which has long worked to attract designer brands to the platform. “At Amazon Fashion, we continually expand our assortment through strategic relationships with brands to inspire and delight our customers,” said Amazon Fashion president Muge Erdirik Dogan in a release. “Rent the Runway’s collection continues to grow our offering in pre-loved and designer fashion.”
Hyman believes Amazon Fashion will strengthen Rent the Runway’s positioning as a customer discovery platform for designer brands. “We’re a very important marketing channel for these brands,” she says. “Most customers who come to Rent the Runway are renting brands they’ve never owned before, and if you think about this macro environment, it’s becoming harder and harder for brands to acquire new customers.” She says that Rent the Runway has 100% retention of brand relationships, and that exclusive designs and consignment—which enables Rent the Runway to acquire goods with little upfront cost and share revenue with brands over time—now make up nearly two thirds of its total inventory.
This raises questions about how Rent the Runway’s evolving model fits into the wider sustainability agenda and the push toward circularity. “What we have now is overproduction and overconsumption,” says Ola Bąkowska, project manager at Amsterdam nonprofit Circle Economy. “Renting is a way of slowing that down, but only if consumers and users of rented clothing will rent instead of buying new stuff.” Rental is estimated to extend a product’s life by 1.8 times, according to a report from McKinsey and Global Fashion Agenda, based on the average number of rentals during a product’s lifetime.
Hyman says the aim is to encourage people to invest in better-quality clothing when they do buy new: “We want to be a substitute for fast fashion and take away all of the trend-based items that you would have purchased and worn only once or twice,” she says. “We’re not trying to get people to stop buying clothes; we’re trying to get them to stop buying low-quality, unsustainable, underutilized clothing.” The pieces from the Collective have the designer’s brand name in the tag and are manufactured by Rent the Runway in “a host of factories all over the world,” Hyman says. “Therefore, we’re only paying the manufacturing cost for the inventory and not the markup between manufacturing cost and wholesale.”
Preworn items, which Rent the Runway discounts to its customers depending on factors such as on how long the item has been in rotation, will be priced by Amazon. Amazon has previously offered preowned fashion via Shopbop’s Pre-Loved Edit (offering designer bags and accessories) and via What Goes Around Comes Around, through a brand store on Luxury Stores at Amazon (offering luxury accessories and apparel).
Rent the Runway began as a way for people to rent one-off designer pieces for a fraction of the retail price, with a focus on formalwear and special events. It then expanded into other womenswear categories, such as workwear, denim, jewelry, and bags, and added a subscription option that enabled a certain number of monthly rentals for a standard fee. It began a vast expansion phase in the years leading up to the pandemic, with partnerships that included Neiman Marcus and W Hotels, and opened physical locations in five major US cities, including New York, San Francisco, and Washington, DC.
Then—fresh from a $1 billion valuation—the company faced a series of challenges starting in 2019. First, a system switchover glitch resulted in a two-week suspension of orders and new customer onboarding. In response, Rent the Runway brought on a new chief supply chain officer with experience in operations at Amazon, and a board member with experience leading fulfillment operations at Amazon. Then, amid the pandemic, it permanently closed its bricks-and-mortar stores.
Rent the Runway became a publicly traded company in October 2021, with goals of increasing its subscriber count and decreasing its costs of operation. In September of last year, it reported record revenue but announced plans to lay off almost a quarter of its corporate employees to reduce costs.
Hyman says the tide has turned, revealing that rentals for special events are higher than they’ve ever been, and 55% of subscribers are now renting for everyday use, which is up 10 points from pre-COVID levels. In December the company reported quarterly revenue that beat expectations. It reported revenue of $77.4 million, which was up 31% from a year ago. Its losses were $36.1 million, also down. Its number of active subscribers was up 15% year on year to 134,240. In September 2022 it had reported a profit for the first time, with gross profit at $32.4 million.
Additionally, as luxury brands increase their sustainability efforts, many are taking a closer look at adding both rental and resale to their business models, although rental seems to be less of a focus than resale. In 2021 consultancy Bain & Co. estimated that by 2030 a sustainable luxury brand could include rental for 10% of its business model. A report that same year from Globaldata (commissioned by resale company Thredup) found that while rental, resale, and subscription will be the fastest-growing retail sectors in the next 10 years, the average person is predicted to spend just less than 1% on their overall apparel spend by 2030.
Hyman is encouraged. “We feel that the customer is really back, and I think that’s evidenced by this strategic relationship with Amazon,” she says, “and it’s evidenced by the fact that major department stores have come out and said, ‘Secondhand is going to be a major part of my strategy over the next five to 10 years.’”
Additional reporting by Bella Webb
This post was originally published in Vogue Business.