Rent the Runway Plans to Double Inventory to Retain Subscribers
Rent the Runway reportedly expects greater selection and cost-effectiveness to help it keep the recent momentum it has gained in growing its base of active subscribers.
[contact-form-7]The apparel-rental company saw its number of active subscribers grow 23% to reach over 147,000 during the quarter ended April 30, the Wall Street Journal (WSJ) reported Tuesday (June 17).
Rent the Runway Chief Financial Officer Sid Thacker told the WSJ that the company is making its largest-ever investment in inventory because offering more brands and styles is a way to hold the interest of subscribers.
The company did not say how much it is investing in inventory, but said it plans to double its inventory this year, according to the report.
To reduce the cost of growing its inventory, Rent the Runway is forming more agreements in which brands design apparel exclusively for the company or provide apparel at no cost or lower cost in exchange for a share of the rental revenue, the report said.
In addition, Thacker told the WSJ that consumers may turn to renting apparel rather than buying it as a way to avoid tariff-driven price increases.
Rent the Runway doesn’t have significant direct exposure to tariffs, although the brands with which it partners may increase their prices in response to the levies, per the report.
Asked by the WSJ if brands’ price increases could lead to Rent the Runway doing the same, Thacker said: “We’re trying to take care of customers.”
Rent the Runway CEO Jennifer Hyman said in December that the company was back in “growth mode” after years of focusing on cost-cutting and margin improvement.
The company was focusing on its subscription business with moves like its introduction of a new $119/month subscription tier in November, which Hyman said was aimed at expanding its customer base and positioning the company for growth in 2025.
“We’ve seen high engagement among a much more diverse age graphic in subscription and diverse use cases gives us really nice momentum in our subscription business,” Hyman said during a December earnings call. “2025 is going to be the year where we really accelerate our subscriber acquisition and growth.”
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