Rent the Runway outgrows its logistical capabilities, proving fashion is pain

As Rent the Runway fights through the growing pains of being a $1B company, its seams are beginning to show.

September 26, 2019

It’s the opposite of being all dressed up with nowhere to go. Rent the Runway customers aren’t receiving their orders… and they’re airing their dirty laundry on social media.

Who’s behind this crime of fashion?

RTR started an online service that rents out designer dresses for special events like weddings or corporate galas. 

The business model works because it allows customers to spend a small fraction of what they would have dropped at a high-end boutique. And because many people rent a dress before it’s retired, the company more than recoups the cost of its purchase.

In 2016, RTR launched a subscription service for everyday clothes. “Unlimited” subscribers pay $159/month for a rotating selection of four pieces. With 100k subscribers, this service accounts for 70% of the business. 

Earlier this year, RTR raised $125m in funding and its valuation soared to $1B. 

But now its seams are starting to show

Adding the subscription service to the one-off rental biz has made the company’s operations incredibly complex. Shipping orders, receiving returns, and inspecting and cleaning garments before sending them back to the inventory takes a specialized logistics process. 

Over the past week or so, 100s of RTR customers have taken to Twitter and Facebook complaining of canceled deliveries, poor communication, and customer service wait times of 3+ hours. 

That’s not a good lewk

The company blames a new warehouse system for the delays and says customers can expect improved inventory availability and order efficiency by next week. 

This isn’t the first time the company has had to say sorry. Two months ago, RTR emailed an apology to some customers for dropping the ball gown. It then promised to double the company’s customer service team and improve delivery issues.

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