Rent the Runway

About Rent the Runway

Rent the Runway, the clothing rental service, went public in October 2021 at a 1.7 billion valuation. The stock fell over 90 percent from its IPO price. In 2022, the company laid off 24 percent of staff. CEO Jennifer Hyman blamed macro conditions. The company faced high logistics costs, customer retention challenges, and returns processing complexity. The business model of renting designer clothes appealed to urban professionals but had limited market size. Rent the Runway struggled to achieve profitability despite raising over 500 million in venture capital. The stock recovered partially in 2023 and 2024 as the company cut costs and improved logistics. The case illustrates how subscription business models can struggle with unit economics.