If you’ve been just dying to get your hands on some fabulous runway pieces you’ve seen on your favorite celebs, look no more. Last week, Rent the Runway, the designer clothes rental business, announced that they are now selling clothes too, entering a booming resale market. In an interview with Vogue, the company confirmed that all shoppers could now buy used designer clothing from its site at a discount. Previously, this option was only available to people who paid an ongoing subscription to rent clothes.
“Our goal is to be a fully circular platform where the customer has the flexibility to choose how she wants to consume our products,” co-founder Jennifer Hyman told Vogue. “This is another way for customers to engage with us for the first time. There’s a very broad audience of people who want to consume secondhand, but potentially didn’t come to our platform in the past because they weren’t ready to subscribe or they didn’t have an upcoming party or event. Now, they have the opportunity to experience the quality of our assortment, the diversity of our brands, and the incredible fashion on our platform.”
The news of this change comes after a tumultuous year for Rent the Runway. Business Insider reported that the pandemic ravaged the company’s business and demand for renting one-off pieces or officewear dried up overnight, wiping $250 million from the company’s valuation and forcing it to close its stores and lay off or furlough half of its staff. Meanwhile, the resale market is booming, and according to estimates from the analyst Jefferies, generates nearly $30 billion per year and is on track to make up more than 10% of the apparel market over the next 10 years.
Hyman told Vogue that by combining rental with resale, the company can boost profit margins through multiple transactions on the same item. “Because we monetize the product through subscription, by the time we’re selling something, we may have already rented it a few times and made money on it. We don’t have to charge as much as some of our competitors, who only have one opportunity to make their margin. There’s a value to the customer that she’s likely going to find better pricing on our platform,” she said.
Business Insider reports that Rent the Runway already had a partnership with online resale platform ThredUp, which launched in September last year and brought used, unsold inventory onto ThredUp’s site. As of last Thursday, hundreds of items from Rent the Runway were already listed on ThredUp’s site.
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