How Fashion Unicorn Rent the Runway Lost Over 90% of Its Value | WSJ What Went Wrong
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Published 2024-06-06
WSJ’s Sabela Ojea breaks down why Rent the Runway’s stock has plummeted over 90% and why it’s shuttered all five of its stores.
Chapters:
0:00 Rent the Runway
0:39 The rise
2:41 The turning point
4:19 Competition
5:09 The fall
5:57 What’s next?
What Went Wrong explores the challenging conditions and decisions that led to a company's downturn.
#RenttheRunway #Fashion #WSJ
All Comments (21)
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Why Lululemon’s stock is going out of fashion: on.wsj.com/3Rj0uSl
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They should have focused on customers like younger women who needed a fancy dress for some milestone in their life. Why they focused on older women with dispoable income who would be laughed out of their social circle for renting a dress is beyond me. They didn't know their customer and they still don't. Weddings and bridesmaid's dresses would be a perfect starting point.
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I used them consistently for sorority events from 2016-2020. Once you could no longer rent individual items for events, I stopped using RTR entirely. I don’t need a monthly subscription for everyday clothes. I only used them for formal occasions and then they totally changed their business model.
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When they first started out I rented dresses several times with no hitches, but after a few years they repeatedly sent me clothing that arrived late, absolutely REEKED of body odor and had clearly not been cleaned before it was sent to me leaving me scrambling at the last minute to purchase a dress for an important event. That was the end of it for me and probably a lot of other people.
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Why would the company go after 'older, more established women with more to spend'...a lot of these women would already buy designer anyway. They were targeting a segment of the market that was too narrow - women willing to shell out $100+ a month on clothes they don't even own, but somehow unable or unwilling to actually buy from more expensive brands.
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Not sure why they didn't put a focus on wedding dresses. They are one-time use and tend to be very expensive. I think people would love to rent their wedding dresses.
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As a petite-sized woman, found their offerings limited - no actual petite sizes but would purport some styles to be ‘petite-friendly’ but fit terribly. No point in ‘luxe’ if fit is bad.
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(5:25) The money raised by the IPO was used to give increased salaries and bonuses to the CEO and upper management instead of focusing on company performance and inventory. Maybe they were stupid and greedy or they already knew the boat was sinking (and it was time to steal all the money before the company went bankrupt). Either way, this company will never come back.
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None of their stuff is designer anymore. It’s mostly target quality, private label. They advertise stuff that isnt even available.
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fashion and trends move too quickly, it’s unsustainable for RTR to constantly keep their inventory stocked with various trends, sizes all at the luxury price tag.
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As a girl who was in high school in the early 2010s, this site saved me so much money for prom/homecoming dresses!!
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Interesting that there's no mention of clothes arriving looking worn out or dirty.
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We lost half our customers! Let's have an IPO! ... buffoonery in business begets bankruptcy.
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One thing that went wrong is its non-existent return policy. If an outfit does not fit, then you can’t get your money back or give your credit to someone else as a gift. They keep your money.
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What went wrong? Many things went wrong. Rent the Runway was never a true unicorn. It forced it's way to get the highest evaluation in the shortest amount of time. The company was overvalued, was never profitable or close to breaking even. Most importantly it wasnt sustainable. The founders and their board were inexperienced.
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I was a very happy subscriber before 2020 and resubscribed in 2023 finding the styles tired and the clothes lower quality then I remembered. After a few months I cancelled. Interesting to come across this analysis
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Getting rid of their unlimited model after saying they would never do that was a mistake.
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the fact the company refused to comment tells you it will file for bankruptcy soon because they dont see a way out. Otherwise they'd be talking about their turnover strategy. What i love is the hubris of the IPO having to be valued at 1bn. Why would such a rental business be worth a billion, other than it's a cool sounding number? It's stupid, and you can't dig yourself out of a -90+% hole.
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Makes me sad since the times i have used rent the runway, its been wonderful and a life saver. Got to wear beautiful dresses that i never would have imaged
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I unsubscribed when they ended the “unlimited” Subscription. It doesn’t make sense for me to rent 5 items and only 1 fits. They should have rented out the items and then hold end of season sales to sell old season items and buy new items. Regardless I was only interested when it was unlimited
