Rent the Runway, a $1 billion fashion startup, is permanently closing all of its physical stores as coronavirus ravages retail
The coronavirus pandemic has taken a toll on businesses, especially retailers. To date, the virus has not only claimed hundreds of thousands of human lives but also destroyed thousands of businesses. Dozens of retailers have already been pushed into bankruptcy due to the pandemic. One of the retailers still staying afloat is New York City-based Rent the Runway, a fashion startup and an online e-commerce website that allows women to rent designer apparel and accessories.
Today, Rent The Runway announced it’s permanently closing all of its physical stores as the unicorn startup rethinks retail during the pandemic. The affected stores include its five physical retail locations in New York City, Chicago, Los Angeles, San Francisco, and Washington, D.C. The company said the decision is part of its effort to focus its investments on digital and adding more drop boxes for customers.
Founded in 2009 by Jennifer Hyman and Jennifer Fleiss, Rent the Runway is an online e-commerce website that allows women to rent designer apparel and accessories. It is transforming the way modern women get dressed – and in turn disrupting the $1.7 trillion fashion industry – through the concept of renting over buying clothing.
The startup pioneered the ‘closet in the cloud’ and believes that women everywhere will soon have a subscription to fashion, making renting an indispensible utility while also empowering them to feel like their best selves everyday. The company carries hundreds of thousands of pieces of apparel and accessories by 550+ designer partners with options for work, weekends and special occasions.
A little over a year ago, Rent the Runway raised $125 million in funding at a $1 billion valuation making it a member of the highly coveted unicorn startup club. The round was led by existing investors Franklin Templeton Investments and Bain Capital Ventures.
Rent the Runway said it plans to continue to grow its network of drop box locations. So far, the company has partnered with WeWork, Nordstrom and West Elm.
“This has been an evolution over the past two to three years,” Anushka Salinas, Rent the Runway president and chief operating officer, said in an interview. “We always knew we wanted and will continue to have a physical presence strategy. What we know now is the physical presence strategy is about drop boxes.”
In April, Rent the Runway furloughed 35% of its employees as coronavirus ravages retail sector.