New York City-based Rent the Runway is entering the $33 billion fashion resale market.
The company’s customers will soon be able to buy pre-owned designer clothes in addition to renting the outfits, the company’s CEO, Jennifer Hyman, said. Customers that are looking to buy outfits do not need to have a membership. Previously, Rent the Runway only allowed paying members to buy used dresses from brands such as Rebecca Minkoff, Lululemon and Tory Burch at a discounted rate.
The initiative is part of the company’s effort to grow its business and expand its reach to new customers, especially as consumers are now resuming their pre-pandemic routines and are starting to socialize and return to working from offices.
“We think that we’ll be able to convert more people to shopping secondhand,” Chief Executive Officer Jenn Hyman said.
“And from there, once they have the experience of buying something from us and seeing the quality, many of those people will end up converting into rental.”
The company has recently made a series of moves to reinvigorate its business after it suffered massive losses during the pandemic.
In August last year, the company made a digital pivot by shuttering all of its physical stores and adding new drop-off locations as it looked to ready its business for consumers’ evolving shopping preferences. A month later, the company forwent its popular unlimited rentals options and introduced a new three-tiered pricing model. More recently, it appointed Gwyneth Paltrow to its board of directors.
“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.
The company’s efforts seem to be paying off. It has seen a 93 percent increase in its active subscriber base. By the end of 2021, it expects to outpace the size of its 2019 customer base.
Rent the Runway is said to be preparing for an IPO, which it may file later this year.
The company is far from the only player that is eyeing the lucrative resale market, which is on track to be worth $64 billion by 2024.
Yesterday, Etsy’s CEO Josh Silverman announced that the company is planning to acquire Depop in a $1.63 billion deal. The acquisition of the popular Gen Z-focussed platform will help Etsy cut itself a share of the fashion resale market and power its growth as more consumers return back to shopping in physical stores.