Latest news with #RentTheRunway
Wall Street Journal
17-06-2025
- Business
- Wall Street Journal
Rent the Runway Sees Rebound in Subscribers, and Aims to Add More Styles to Keep Them
Rent the Runway's active-subscriber numbers have rebounded after hitting a multiyear low earlier this year, and the online clothing-rental company is making its largest-ever investment in inventory to keep the momentum going. The company had over 147,000 active subscribers renting wares from Gucci, Ulla Johnson, Oscar de la Renta and many other labels at the end of its first quarter ended April 30, up nearly 23% from the previous quarter. While the company often sees a surge of subscribers in the late spring just before proms and graduations followed by the June wedding season, its latest count tops first-quarter figures in recent years. Whether Rent the Runway remains an appealing option will depend in part on whether consumers, some of whom are spending more cautiously, decide that monthly apparel rental fees—ranging from roughly $100 to $315—are worth it. Rent the Runway's finance chief, Sid Thacker, thinks they will, particularly as the company adds to the brands and styles it offers. 'We're providing all of this at tremendous value,' he said. 'Customers are getting thousands of dollars worth of clothing for around $100-plus per month.' Shoppers several years ago flocked to apparel-rental options, embracing the access to designer clothes for weddings, business meetings and other events without having to shell out hundreds or thousands of dollars. But since the pandemic, the apparel-rental market has taken a hit. Many consumers still work from home and even within the workplace are dressing more casually. Meanwhile, whipsawing tariff announcements have left some shoppers wary. They also have more rental options, with newer entrants such as Nuuly, launched in 2019 by Urban Outfitters, increasingly capturing shoppers' attention. For Rent the Runway, the crosscurrents have hit hard. The company's shares plummeted nearly 90% in the year after going public in 2021 and have been down significantly since. The company has also hemorrhaged active subscribers and has yet to turn a profit. Rent the Runway executed a reverse stock split last year to stay listed, while also cutting around $40 million in costs over three years. But in its latest quarter, the company seemed to shift gears. Along with the record number of active members—subscribers account for nearly 90% of Rent the Runway's revenue—retention was the strongest it has been in four years, Thacker said. And the company was nearly cash-flow break-even in the fiscal year compared with burning around $100 million a few years ago, he said. Revenue in the latest quarter fell 7.2%, to nearly $70 million, compared with a year earlier. By Monday afternoon, Rent the Runway shares were down nearly 40% from the start of this year. But Thacker expects the positive change to continue. One reason is inventory. Adding brands and styles holds subscribers' interest, which is why the company plans to double its inventory in this year and add around 90 new labels to its roster of hundreds of brands. Rent the Runway declined to say how much it is investing in inventory. Rent the Runway has worked to make various designer dresses, skirts and other items easier on the balance sheet. For one, some brands design exclusively for Rent the Runway, wares that tend to come at a significant discount in exchange for access to the company's customers. Some brands also provide inventory at no or minimal cost and then take a share of the revenue when items are rented. Roughly 70% of the company's inventory is expected to fall into one of these two categories in the current fiscal year, up from around 20% in 2019. And as rental businesses shed some of the stigma that some people associate with wearing used clothing, shoppers are more willing to temporarily freshen up their wardrobe without the expense of a purchase, according to Thacker. Concerns about tariff-driven price increases on clothing, toys and more could add to the appeal of renting apparel, he said. But analysts question whether stretched consumers will stick with their subscriptions. 'The rental option is interesting in that it affords newness at a reasonable price. But it's not necessarily the most economical,' said Simeon Siegel, a managing director at BMO Capital Markets. 'Plenty of people would say that a stretched consumer will cancel their subscriptions.' That likelihood increases if tariffs drive subscription prices up, analysts said. Rent the Runway doesn't have significant direct exposure to tariffs, Thacker said. Its brand partners, however, might have to raise their own prices to offset the levies, which could push up Rent the Runway's costs. Asked if subscription prices would go up as a result, the CFO said: 'We're trying to take care of customers.' Rent the Runway's efforts to transform the business come as the overall luxury market is struggling, said Herb Blank, chief quantitative analyst at stock-valuation and forecasting firm ValuEngine. The company has a history of losses, and analysts appear to have stopped covering it, an indicator on the company's performance, he said. This month, for instance, no analysts were on the earnings call, compared with two a year ago and eight in June 2023, according to S&P Global Market Intelligence. ValuEngine stopped covering the company this month. 'For a company that's really under the gun, they are doing everything to try to right the ship,' Blank said. 'It's just … they're swimming upstream.' Write to Jennifer Williams at
Yahoo
17-06-2025
- Business
- Yahoo
Nuuly is dominating the apparel rental market
This story was originally published on Retail Dive. To receive daily news and insights, subscribe to our free daily Retail Dive newsletter. Apparel rental company Nuuly has 'quickly become an industry leader,' with over twice the active subscribers as the next-largest apparel subscription business in the U.S., Rent the Runway, according to a Walls Fargo note lead by Ike Boruchow. The Urban Outfitters-owned company has captured subscribers that either previously used apparel rental or have never rented before. Most of its under 30 customers this year were new to rental. Nuuly also maintains one of the highest retention rates in the industry, with a 90% retention rate in year one and around a 40% retention rate in years three to five, per the report. One of Nuuly's most important competitive advantages is its ability to obtain inventory at cost from its sister companies, including Urban Outfitters, Anthropologie and Free People. Those products make up around 45% of its current inventory, according to Wells Fargo analysts. In Urban Outfitters' latest earnings, Nuuly's net sales were $124.4 million — an almost 60% increase year over year. The company saw a 53% increase in average active subscribers, which contributed to a 60% increase in brand revenue and added almost 400 basis points of revenue growth to Urban Outfitters' top line. 'The performance at Nuuly over the past year has fortified our confidence that our business model is strong, and the rental market opportunity is very large,' Urban Outfitters COO Frank Conforti said on a first quarter 2026 earnings call with analysts. 'We are thrilled that Nuuly now appears to be leading the industry with an opportunity to continue to see significant growth. Based on our current plans, we believe Nuuly could deliver a healthy double-digit revenue and profit growth in the second quarter.' Nuuly's revenue surge comes as the apparel rental site sets its sights on a high sales goal. After turning a profit during its last fiscal year, Nuuly President Dave Hayne said the company aims to reach $500 million in sales this year, a milestone he called 'an achievable goal.' Urban Outfitters also recently expanded the brand's fulfillment capacity. Last year, the company opened a 600,000-square-foot fulfillment center for Nuuly in Raymore, Missouri. The facility includes full laundering and clothing alteration capabilities and was expected to provide Nuuly with the capacity to triple its active subscriber base. Competitor Rent the Runway recently reported that Q1 revenue fell 7.2% year over year to $69.6 million. Its average active subscribers dipped 2% from the year-ago quarter to 135,896. Nuuly was launched in 2019 and offers 25,000 styles from over 500 brands and currently has around 380,000 subscribers. Recommended Reading SKU'd: Balenciaga is ready to dress you for the apocalypse Sign in to access your portfolio
Bloomberg
06-06-2025
- Business
- Bloomberg
Rent the Runway's Comeback Plan
Rent The Runway's subscriber base is growing as the fashion rental company reworks its business model by offering more brands and debuting a new rewards program. Jennifer Hyman, CEO of Rent The Runway joined Bloomberg Open Interest to talk about the revamp. (Source: Bloomberg)
Bloomberg
05-06-2025
- Business
- Bloomberg
Rent the Runway Plots Comeback With More Clothes, Rewards
Rent The Runway Inc.'s subscriber base is growing again, reversing a slide as management reworks the clothing rental service's business model to improve the product offering and boost customer retention. The fashion business reported that it had over 147,000 active subscribers, its highest-ever count, in its most recent quarter after a sharp drop earlier this year.
