As it completes its restructuring and moves forward on the path to profitability, rental subscription service Rent the Runway has opened a storefront on Amazon where it will sell both pre-worn and new apparel.
Rent the Runway’s new branded Amazon Fashion storefront features hundreds of pre-worn styles from 35 brands. The company also plans to roll out an exclusive selection of new merchandise from its Design Collective, which features collaborations with top designers for limited-edition collections informed by Rent the Runway’s proprietary customer data and insights, that will only be available through Amazon Fashion and RentTheRunway.com.
A move that most major brands vehemently resisted for years, Rent the Runway is now the latest in a growing slate of retailers selling on Amazon that includes Gap, Victoria’s Secret, Peloton, Disney Store and Party City.
“Collaborating with Amazon Fashion brings Rent the Runway incredible brand awareness,” said Jenn Hyman, Co-founder and CEO of Rent the Runway in a statement. “We believe strategic relationships like this can ignite a new engine of growth for our business. They also showcase demand for our products beyond our community and allow more customers to experience exclusive data-driven fashion from our top design partners.”
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Rent the Runway has struggled since the pandemic, when homebound consumers opted not to refresh their wardrobes. Despite sharp declines in its business, the company moved forward with its IPO in October 2021 and has been working toward a comeback ever since. In September 2022, the company announced a restructuring that included laying off nearly one-quarter of its corporate staff following another round of declines in subscribers in fiscal Q2 2022, which ended July 31, 2022.
There was some light on the horizon in fiscal Q3 2022 though, with active subscribers increasing to just above 134,000 — a gain of 15% YoY and a slight increase from the 124,000 active subscribers on the rolls in Q2 2022. Revenue for the quarter was up 31% YoY, from $59 million in Q3 2021 to $77.4 million in Q3 2022. Gross profit was also up 60% YoY in the quarter to $31.8 million, and net loss was down to $36.1 million compared to $87.8 million in Q3 2021. On the heels of this strong Q3 showing the company raised its guidance for 2022 and said that the Amazon Fashion deal was reflected in those revised projections.
The new partnership with Amazon is just one of the many ways Rent the Runway is looking to diversify its reach. The company already has similar partnerships to sell its pre-worn clothing on SaksOFF5TH.com and resale marketplace ThredUP. Additionally, Rent the Runway is working to build out its collection of exclusive designs and launched a partnership selling those designs wholesale to an unnamed third-party retailer in Q3 2022.
