Company Overview: Rent the Runway, Inc.

Business Description

Rent the Runway (RTR) is a fashion rental platform that provides women with access to a wide variety of designer clothing and accessories through a shared closet model. Founded in November 2009 and incorporated in Delaware, the company offers a digital "Closet in the Cloud" consisting of thousands of styles from hundreds of brand partners.

Core Offerings

• Subscription Service ("Subscription"): Customers select from multiple plans, starting with five items per shipment, customizable with additional slots and shipments. Subscribers wear items repeatedly, return some or all, and receive new items frequently.
• "Reserve": A-la-carte rentals for 4 or 8 days, primarily for events, with options for backup sizes and styles.
• "Resale": Customers can buy pre-loved styles at discounts of up to 90% off retail price or purchase items they already own.

Customer Metrics

• Total Customers Served: Approximately 3 million lifetime customers.
• Subscribers (as of January 31, 2025):
  • Active Subscribers: 119,778
  • Total Subscribers (including paused): 164,004
  • Average Active Subscribers in FY2024: 132,574

Revenue and Financials

• Revenue Composition (FY2024): 88% generated from subscribers, unchanged from FY2023.
• Revenue Breakdown:
  • Subscription revenue is the primary contributor.
• Net Losses:
  • FY2025: $(69.9) million
  • FY2024: $(113.2) million
• Total Outstanding Shares (April 11, 2025):
  • 3,825,951 shares of Class A common stock
  • 155,544 shares of Class B common stock
• Market Capitalization (as of July 31, 2024): Approximately $40.9 million

Employees

• Total Employees: 1,053
  • Full-time: 912
  • Part-time: 141
• Locations:
  • United States (including fulfillment centers in New Jersey and Texas)
  • Ireland (Galway office for engineering, data analytics, and IT)

Business Model Advantages

• Brand Partner Relationships: Collaborates directly with many of the top fashion brands, offering exposure and data insights.
• Product Acquisition: Utilizes three channels:
  • Wholesale (30% of FY2024 product acquisitions)
  • Share by RTR (48%)
  • Exclusive Designs (22%), including collaborations with brands for durable, lower-cost styles
• Data and Technology:
  • Collects extensive data on customer preferences and product performance.
  • Uses proprietary algorithms for personalization, demand forecasting, and product recommendations.
  • Operates a custom platform supporting e-commerce, logistics, and product control.

Fulfillment and Logistics

• Fulfillment Centers:
  • Arlington, Texas and Secaucus, New Jersey
  • Total floor space: ~486,000 sq. ft.
  • Capacity: over 2 million garments and accessories
  • Capable of handling at least 4x FY2024 subscriber volume
• Logistics Operations:
  • Proprietary reverse logistics for cleaning, storage, and return.
  • RFID technology for tracking.
  • Partnered with national carriers for transportation and delivery, including at-home pickup services.

Strategic Focus for FY2025

• Increase rental product availability and desirability.
• Enhance customer experience with new features and personalization.
• Grow brand partner relationships and product assortment.
• Improve marketing efficiency, growth, and customer retention.
• Achieve profitability goals by increasing Share by RTR items and managing costs.

Industry and Market Position

• Operates in a highly competitive, rapidly evolving fashion rental industry.
• Faces competition from other rental services, traditional retail, resale platforms, and direct brand retail.
• Relies on consumer shift from ownership to access-based fashion consumption.
• Business seasonality affects subscriber growth and revenue, especially around peak seasons like spring, fall, weddings, and holidays.