A Rent the Runway store in New York City on Oct. 22. Photographer: Michael M. Santiago/Getty Images
In 2009, two Harvard Business School graduates, Jennifer Hyman and Jennifer Fleiss, embarked on a journey that would revolutionize the fashion industry. Their brainchild, Rent the Runway, was born out of a simple yet powerful idea: to make high-end fashion accessible to everyone, regardless of budget or occasion.
The concept of Rent the Runway stemmed from a personal dilemma faced by Jennifer Hyman. As she prepared for a wedding, she found herself frustrated by the exorbitant cost of purchasing a designer dress she would only wear once. Recognizing a gap in the market for a more affordable and sustainable alternative, Hyman teamed up with her friend Jennifer Fleiss to bring their vision to life.
Together, Hyman and Fleiss conducted extensive market research and fine-tuned their business model. They reached out to designers, conducted focus groups, and secured their first round of funding to officially launch Rent the Runway in November 2009.
Rent the Runway's premise was simple yet innovative: customers could rent designer dresses and accessories for a fraction of the retail price, allowing them to look and feel their best for special occasions without the hefty price tag. The company partnered with top designers to offer a curated selection of clothing and accessories, catering to a wide range of tastes and preferences.
Despite its promising concept, Rent the Runway faced challenges in its early days. Building relationships with designers, managing inventory logistics, and overcoming skepticism from industry insiders were just a few of the hurdles Hyman and Fleiss had to overcome. However, their persistence and vision paid off as Rent the Runway quickly gained traction and became a staple in the fashion landscape.
Over the years, Rent the Runway has continued to innovate and expand its offerings. In addition to its original rental service, the company has launched subscription options, allowing customers to rent a certain number of items per month for a flat fee. It has also expanded into new product categories, including everyday clothing, accessories, and even home goods.
Financially, Rent the Runway achieved a major milestone in March 2019 when it was valued at $1 billion, earning the coveted "unicorn" status after a $125 million funding round. The company reported revenues nearing $157 million in 2018, primarily from its growing subscription services. However, the COVID-19 pandemic posed significant challenges, leading to temporary service suspensions, layoffs, and store closures. In response, the company adapted by cutting costs and streamlining operations to maintain its market presence.
In October 2021, Rent the Runway took a significant step by going public under the ticker symbol "RENT". The IPO, priced at $21 per share, raised $357 million but also introduced new challenges and volatility in the stock market.
Today, Rent the Runway stands as a testament to the power of innovation and entrepreneurship. What started as a simple idea has blossomed into a global phenomenon, empowering millions of women to experience the joy of high-end fashion without the commitment of ownership. As the fashion industry continues to evolve, Rent the Runway remains at the forefront, proving that style, affordability, and sustainability can indeed go hand in hand.