- All Rent the Runway shoppers are now able to buy, as well as rent, its secondhand clothes.
- Previously, only paying members of its clothes rental services could buy its clothes.
- Rent the Runway has had a tumultuous pandemic year, closing stores and laying off staff.
- See more stories on Insider’s business page.
Rent the Runway, the designer clothes rental business, is now selling clothes too, entering a booming resale market.
This week, the startup 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.
The news of this change comes after a tumultuous year for the company. The pandemic ravaged its 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.
In an interview with Vogue this week, Rent the Runway CEO Jennifer Hyman said the company hoped to broaden its reach by reselling clothes.
“This is another way for customers to engage with us for the first time,” she told Vogue. “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.”
And by combining rental with resale, the company can boost profit margins through multiple transactions on the same item, she said.
“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.
Rent the Runway already has a partnership with online resale platform ThredUp, which launched in September last year and brought used, unsold inventory onto ThredUp’s site. Insider contacted Rent the Runway and ThredUp for more details on their future plans for this partnership, but did not immediately hear back.
As of Thursday, hundreds of items from Rent the Runway were listed on ThredUp’s site.