Rent the Runway enters the $30 billion resale market, making its secondhand designer clothes available for all shoppers to buy, as well as rent

rent the runway
Rent the Runway.

  • 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.

Read more: EXCLUSIVE: Rent the Runway CEO Jennifer Hyman, one of the most successful female founders, is fighting to save her company

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.

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Gwyneth Paltrow is Rent the Runway’s newest board member – but she’s never used the clothes-rental service

Gwyneth Paltrow Getty Images
Gwyneth Paltrow joins Rent the Runway’s board.

  • Gwyneth Paltrow is joining the board of directors at clothes-rental service Rent the Runway.
  • Paltrow told The New York Times that she’s never used Rent the Runway.
  • “I’ve got my welcome code in my inbox, so I’ll soon be trying it out,” she told The Times.
  • See more stories on Insider’s business page.

Gwyneth Paltrow, actress and founder of lifestyle brand Goop, is joining the board of directors at Rent the Runway, the clothes-rental service. The news was first reported by The New York Times.

Paltrow told The Times that she’s never actually used Rent the Runway.

Rent the Runway started in 2009 as a way to rent one-off items for special events. It’s grown into a platform for people to rent everyday clothes instead of buying new ones. It has also added kids’ clothing and homeware rentals, via a partnership with West Elm.

“What’s fascinating is that, in my own way, I’ve been renting the runway for years,” she told The Times. “Borrowing a dress from a designer for a single moment at a premiere or an awards show, then giving it back afterward. Now I guess everyone is doing it. But I’ve got my welcome code in my inbox, so I’ll soon be trying it out.”

Read more: EXCLUSIVE: Rent the Runway CEO Jennifer Hyman, one of the most successful female founders, is fighting to save her company

Rent the Runway CEO Jennifer Hyman is hoping to tap into Paltrow’s entrepreneurial expertise. Critics say some of Goop’s products and recommendations, including its $66 vaginal jade eggs or bee venom therapy, are backed by unsubstantiated health claims, but Paltrow has built the brand into a $250 million empire.

“Gwyneth’s keen understanding of consumer psychology and unparalleled ability to tap into and define the cultural zeitgeist will play a key role in propelling Rent the Runway forward in a post-pandemic world,” Hyman said in a LinkedIn post this week, adding that the two have known each other for longer than a decade.

Rent the Runway started in 2009 as a way to rent one-off items for special events, and it’s grown to become a platform for renting everyday items as an alternative to buying new clothes. It has also added kids’ clothing and homeware rentals, via a partnership with West Elm.

Pre-pandemic, CEO Jennifer Hyman was prepping it to become the “Amazon Prime of rental” by diversifying into new areas. But when the pandemic hit, people went off the idea of renting clothes. It wiped $250 million from the company’s valuation, and Hyman was forced to close its stores and lay off or furlough half of its staff.

Read the original article on Business Insider