Do you want an unlimited designer wardrobe for only $139 a month?
No, this is not a scam. This is a legitimate service offered by one of our favourite businesses Rent The Runway.
*Quick Disclaimer (I’m Sorry):*
I don’t want to get your hopes up too high so I thought I would break it to you at the start of this article. Rent The Runway is only available in the US and is yet to hit the Australian market.
So what is this Rent The Runway?
Well, Rent the runway is an online service that rents out designer clothing and accessories to women at only a fraction of the retail price. It was started by two young entrepreneurs who met at Harvard Business School, Jennifer Hyman and Jennifer Fleiss.
Check it out: Here
According to Hyman the founder, after 40 or so iterations Rent The Runway (RTR) launched their “Unlimited” subscription service in early 2016. RTR Unlimited is their clothing rental service where women pay a flat fee of just $139 a month and can access RTR’s complete “wardrobe” collection, which includes thousands of clothes and accessories as well as a large line of designer pieces.
“The idea is to create a closet in the cloud. Imagine your closet has a trapdoor in the back and it opens to the Rent the Runway warehouse.”-Brooke Hartmann, senior vice president of subscription at Rent the Runway.
The service allows customers to rent as many as three items at a time, whether it’s for a weekend trip or for 6 months, you can keep the three pieces as long as you want. Members are allowed to rent out up to $40,000 of designer clothing a year and at any time can rent a dress with a retail price of up to $3000 (can you imagine?!).
You can also cycle through as many outfits or accessories as you want as long as you only have three at a time. For example, you can get a designer dress, a back up dress and a handbag for a wedding, return them the next week and receive a whole new outfit within a few days for the following weekend. All shipping is included, you can cancel anytime and all pieces are already insured… sounds almost too good to be true right!
It’s not just the customers who love RTR, businesses are also backing RTR’s innovative model. Within two weeks of pitching their business idea to venture capitalists firms they received their initial round of funding from Bain Capital, $1.75million. The funding kept coming, with the business receiving another $15million from Highland Partners, $15million from Kleiner Perkins and more. Recently, RTR received yet another $60million of funding by new investor Fidelity bringing the company’s total funding to date to $190million.
“Any model that has subscription in front of it is really appealing from an investor point of view,” she said. “It’s cash flow you can count on if you really make it work. ‘Occasion’ is a high churn model; if you’re having to recruit customers more often, the cost cuts into your profit. With subscription, you just have to retain them.”
Despite their cultish following and the large infusions of capital, RTR only achieved profitability on an EBITDA basis on its $100 million revenue run rate this year.
Why we love it:
The company understands changing consumer behaviour.
As Lorna Hall, head of fashion intelligence at WGSN stated:
“It’s that new generational thing: a much more fluid attitude towards owning stuff,” she said. “You can have the experience of owning something. They’re a trader generation, swapping in and swapping out.”
You can always be on trend without ruining the earth!
The 21st century seems to be an era of overflowing and under-utilised closets as a result of fast fashion. Companies produce low quality products at economies of scale, many of which end up in land fill not so long after purchase. According too Business Insider, Australians are the worlds second largest consumers of textiles in the world, buying on average 27 kilograms of new clothing and other textiles each year. The image below depicts 6,000kg of fashion waste which we generate every 10 minutes in Australia…
This is what makes RTR so awesome! Clothing is “re-cycled” when they’re worn again and again. You could have the latest fashion bag when it is “on trend” and when it goes out of season, you don’t have to throw it away, you can just give it back for someone else to rent out. If more consumers’ rented clothes instead of purchasing them, we would see a slow decline in the consumption of fast fashion and wastage. Think of all the environmental benefits!
With the companies new funding, we will see them grow their retail footprint across the US into physical bricks and mortar stores. The plans already include stores in six cities and outposts within high-end chain Neiman Marcus. The infusion of capital will only improve the logistics and service offering of the business and we are looking forward to seeing where the company goes in the coming years (whilst praying they come to Australia)!