Subscription clothing rental startup Rent the Runway just locked in $125m, officially becoming a $1B company. Now, Runway plans to grow its subscription business, expand its clothing and home offerings, and open additional fulfillment facilities.
In other words, the company plans to use the money not for anything specific, but merely to continue to exist.
Wear the same thing twice, you say?
In a time when fashion trends change before you can get the dang things off, many consumers (sure, “millennials”) have taken a one-done-thank-you-hun approach to wearing clothes.
From 2003 to 2016, “garment utilization rates” — AKA the average number of days an item was rocked before it gets donated to Buffalo Exchange (we all know they NEVER actually buy anything) — decreased from 200 to about 120, one of the driving forces behind RtR’s success.
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Unfortunately, it’s causing midrange retailers to wear the costs of overproduction and the uptick in returns — yep, it costs stores money when you wear sh*t and then return it a day later.
Oh, no, not another ‘Netflix for (X)’
Founded in 2009, Rent the Runway started out as a service that loaned designer dresses to women for special events at a sweet price.
Now, the company brings in well over $100m in revenue per year, and has become known as (barf) the “Netflix for dresses.”
During its time, RtR has expanded from its bread and butter of one-time rentals to now three different offerings — including two subscription services.