Rent the Runway expands resale offerings
Rent the Runway, the company known for renting out designer apparel, is opening up its offerings in the resale market.
Published Jun 2, 2021
By: Stephanie Forshee
Rent the Runway, the company known for renting out designer apparel, is opening up its offerings in the resale market to non-subscribers for the first time as it remodels a business that was hit hard by the pandemic.
The New York-based company, which reported a sharp drop in rentals as people embraced athlesiure during lockdowns, announced the move on Wednesday after seeing customers buy “pre-loved items”, or items that have been previously worn, at twice its pre-pandemic rate.
Its experiments into the resale market have evolved over the years. In 2016, the brand allowed subscribers to buy items from their personal rentals. And during the pandemic, as the company struggled, it allowed subscribers to make secondhand purchases directly from its website.
Although it is adding secondhand shopping offerings, RTR’s core business will remain focused on its subscription rentals, considered to be its “hero product”, the company said. In one sign of recovery, RTR’s current number of active subscribers is up 97 per cent from its pandemic low in May 2020, the company said.
“Complete flexibility is the future of fashion,” said Jennifer Hyman, chief executive and founder of RTR, in a statement. “We have all been staring at closets full of clothes that went unworn for the past year, which has created a paradigm shift in how consumers are thinking about shopping and getting dressed. Resale is a natural complement to renting, and a logical next step as we continue to expand Rent the Runway’s value proposition.”
Jane Hali, CEO of investment research firm Jane Hali & Associates, believes it to be a logical move for the company, since “everyone’s looking at resale”. Resale targets Gen Z customers in particular who view the segment as offering value and a way to support companies promoting sustainability.
The secondhand market generates about $30bn annually, and resale accounts for about a quarter of that market, according to figures from Jefferies.
Amanda Lai, senior manager with retail research firm McMillanDoolittle, said RTR’s expansion into the resale market gives it an outlet to “offload last season’s rentals in a way that is sustainable without tarnishing the brand image.”
The company will face competition from secondhand marketplaces like Poshmark, Mercari, The RealReal and Vestiaire Collective, Lai said, noting there is direct pressure from retailers like Lululemon that have recently set up direct resale programs.
RTR’s announcement follows earlier news that Etsy would acquire secondhand fashion app Depop for $1.6 bn in a move to capture a younger demographic.