Rent the Runway on Tuesday will launch The Vault, a new category of luxury eveningwear from more than 20 designers, including 10 brands available to rent for the first time.
New to the site are Oscar de la Renta; Brandon Maxwell; Etro; Anna October; Giambattista Valli; Paris Georgia; Zac Posen; Rachel Gilbert, and Roland Mouret. Other designers, who have been on the site, but will be carried in The Vault are Altuzarra, Hervé Léger, Lapointe, Marine Moscone, Co, Rebecca Vallance, Roksanda, Simkhai, Rosie Assoulin, Mara Hoffman and Prabal Gurung.
The new tier of styles are exclusively available for four- or eight-day one-time rentals, starting with the holiday season, and are appropriate for parties, galas and events.
For example, the Vault carries an Oscar de la Renta floral gown, with a retail price of $6,995, renting for $350; an Etro one-shoulder gown, with a retail price of $2,990, renting for $250, and a green strapless Rachel Gilbert gown with a retail price of $1,100, renting for $135.
“It’s a long time in the making. We’ve always wanted to be launching luxury on Rent the Runway. The whole initial idea behind our business was to give women access to the most aspirational brands in the world,” said Jennifer Hyman, cofounder and chief executive officer of Rent the Runway, in an interview.
“At the beginning of the business, it was hard to convince designers that rental wouldn’t dilute their brands. Now it’s a full-circle moment, the best fashion houses in the world are really excited about partnering with us to offer value to customers, to have customers experience their brands for the first time in this really aspirational way. Providing the experience for a customer and developing those authentic relationships with her through rental has really proven itself to be over the last decade one of the most powerful marketing channels for our brand partners,” Hyman said.
But hasn’t Rent the Runway always had designer brands to rent?
Yes, but never at this high a level, Hyman said. She said Rent the Runway holds a “premium place” in the market and has more than 750 designer relationships, and many have been high end. “But this is the first time that we’re going to be having $9,000 gowns from Oscar de la Renta and currencies in Etro and currencies in Giambattista Valli, in terms of the gowns and the cocktail dresses which are in the thousands of dollars in retail price point,” Hyman said.
Alex Bolen, chief executive officer of Oscar de la Renta, said, “Rent the Runway approached us with an innovative idea to develop a limited capsule of unique merchandise targeted at [its] core customer, and will share customer behavior data. So for us, this is really a new customer acquisition experiment.”
Prabal Gurung said, “Through our collaboration with Rent the Runway, we’re connecting with a new audience who may be discovering Prabal for the first time and that’s truly exhilarating. We look forward to introducing our brand to new customers who might already be admirers, following us on social media, but have yet to experience wearing one of our designs.”
Rent the Runway has had its share of challenges, especially during the pandemic, but its business, while still rocky, appears to be showing some improvement. The company’s third-quarter results are coming out later Tuesday, but its second-quarter results showed net losses narrowed to $26.8 million from $33.9 million a year ago. Revenues for the three months ended July 31 slipped 1 percent to $75.7 million. The company went public on Oct. 27, 2021, on Nasdaq with a closing stock price of $19.29 and its shares closed Monday at 62 cents.
Asked if she’s interested in bringing in top designers such as Prada, Chanel and Giorgio Armani, she said, “I think we approached these brands that we’re launching in The Vault because they are the ones who are most appealing to our core customer right now, who’s a very chic woman in her 30s or 40s, who’s professional and fashionable and more affluent, so she does want to wear Brandon Maxwell or she wants to wear Anna October, or she’s interested in Rachel Gilbert. We really thought about the brand assortment in terms of our customer. As our customer base grows, we want all the luxury brands as partners,” she said.
Hyman said if you think about a luxury department store or Net-a-porter or Saks, they have a luxury consumer who for the most part is in their 50s or 60s. “We have that luxury consumer 20 years earlier,” she said. Of course, the main difference is the Saks or Net-a-porter customer is paying full price for the luxury goods, whereas the Rent the Runway consumer is renting them for a fraction of the cost.
But Hyman believes she’s giving them an introduction to designer merchandise, and they’ll become more acquainted with and more willing to eventually invest in the brand.
“Maybe she hasn’t worn an Oscar de la Renta gown yet, but we’re giving her the first experience doing that,” Hyman said. “This is the exact customer whom these brands want to bring into their world. They want to provide an authentic experience. Most of our customers are professional women who are also balancing family and social lives and they lack time. They’re not able to head into retail stores like previous generations did. They’re actually having a retail 2.0 experience in their own home, being able to rent one of these gowns, having the experience for the first time. They get it in two sizes to ensure the perfect fit and then they become a fan of the brand.”
The Vault will launch with 40 styles in total. “Of course we have depth across the styles. In fact, depth is one of the key strategies that we have deployed across our business. It’s really important to serve the hundreds of thousands of customers we have every single year,” she said.
At the end of the second quarter, Rent the Runway had 137,566 active subscribers.
The Vault is the premium part of Rent the Runway’s event rental service, and one doesn’t need a subscription to rent a style. The subscribers will get a discount on The Vault, but one doesn’t get The Vault as part of one’s subscription.
“It’s a new tier of Rent the Runway and we think it’s a key step in reinvigorating our special event rental business,” Hyman said. “Our assortment over the last few years has become way more premium and way more aspirational across the board. This is a way to reintroduce that premium assortment to customers who may have known us pre-pandemic and might have thought of us a certain way, and now seeing The Vault and coming to the site and seeing the kind of inventory that we carry will give people an even broader perspective on how premium the Rent the Runway experience is.”
A complete size range will be offered.
MSRPs, or manufacturers’ suggested retail price, on The Vault range from $1,000 to $8,900, and rentals will go from $30 for a Paris Georgia slipdress to $400 for an ornate Oscar de la Renta gown. Up until this point, the highest MSRP on Rent the Runway was $2,300.
Hyman said they’ll keep adding styles and brands. “We think this is really the manifestation of the original vision of Rent the Runway, to offer luxury and to make luxury accessible to a consumer who has been kind of dying to wear it,” Hyman said.
Asked whether she’s finding designers much more willing to sell to Rent the Runway these days, she said, “Absolutely. We’ve had 100 percent retention of all of our designer relationships over the last 14 years. It’s been an amazing partnership because designers are getting this unbelievable experiential marketing channel. They find it helps them grow their overall business because customers come in through Rent the Runway, fall in love with the brand and then they buy it.”
Hyman said international expansion isn’t on the agenda. “Not at the moment. But there are plenty of Rent the Runway copycats all over the world now, so there’s a huge appetite for Rent the Runway.” Hyman said they’re not considering getting back into brick-and-mortar at the moment either.
She said the majority of their business is subscription, and the majority of their subscription business is dressing for every day, whether that’s work or for everyday life.
“Ready-to-wear and work wear are our two biggest categories, but what we’re known for is the eveningwear category and renting a dress for a special occasion, and now we’re just taking that to the next level by launching luxury,” she said.