Rent the Runway Inc. will launch an online storefront with Amazon.com Inc., expanding the clothing rental company’s reach beyond the subscription business model.
(Bloomberg) — Rent the Runway Inc. will launch an online storefront with Amazon.com Inc., expanding the clothing rental company’s reach beyond the subscription business model.
The Amazon Fashion platform will feature previously worn styles from designers that Rent the Runway already works with, as well as new and unworn designs. Rent the Runway said that revenue from the partnership, which it recognized in advance of the launch, contributed about $4.6 million to adjusted earnings before interest, taxes, depreciation and amortization in the quarter ended Oct. 31.
Rent the Runway suffered from a drop in subscribers during the pandemic, prompting a restructuring plan in September that included dismissing about a quarter of its nonhourly employees. Since then, the clothing rental company has added new subscribers and in December boosted its annual revenue outlook, noting “considerable progress” on consumer initiatives.
Shares of the company fell significantly in the last three months of 2022 but have rebounded since the better-than-expected earnings report last month. The stock closed down 1.3% at $3.87 on Thursday, paring most of a deeper decline earlier in the day.
“Collaborating with Amazon Fashion brings Rent the Runway incredible brand awareness,” Rent the Runway Chief Executive Officer Jennifer Hyman said in a statement. “We believe strategic relationships like this can ignite a new engine of growth for our business.”
A handful of other apparel retailers, including Gap Inc., have also collaborated with Amazon Fashion in recent months to access the e-commerce giant’s global customer base. Amazon is a major clothing retailer, but the company has long struggled to attract luxury brands, who are wary of counterfeit goods and losing control of their image.
For Amazon, the partnership is a step toward growing its existing apparel and accessories resale offerings. Consumers are increasingly flocking to resale platforms like EBay Inc., Etsy Inc.’s Depop and Poshmark Inc. in search of good deals and a more environmentally friendly way of shopping.
–With assistance from Matt Day and Jonathan Roeder.
(Updates with shares in fourth paragraph. An earlier version corrected details about new items that will be available on Amazon in second paragraph.)
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