Clothing rental startup Rent the Runway has stopped accepting new customers after experiencing delivery delays that have left customers upset and scrambling to come up with a plan B, Recode reported. The company is also offering full refunds and $200 payments to customers who didn’t receive their rentals.
RTR, which is based in New York, is often credited for popularizing the idea of clothing rental for women. The company’s large inventory of designer dresses, clothing, and accessories has made it a go-to destination for special event dress rentals.
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In an email to customers, CEO Jenn Hyman attributed the delays to issues with a “software transformation” the company is going through. Rent the Runway would not be accepting new customers or new orders to be delivered before October 15, she wrote, according to CNBC.
On the business side, the company has raised about $541.2 million since its inception in 2009, and was valued at $1 billion (unicorn status!) in March, according to Crunchbase.
I have used Rent the Runway and have had a fantastic experience with it. The first time I rented, the dress fit well, arrived on time, and I received many compliments on it. (MacKenzie Bezos also happened to wear the same dress to the Vanity Fair Oscar’s party.)
But the current distribution troubles are bad news for the startup because its business model depends on customers receiving their rentals on time. If the startup ever goes public, I’m sure interruptions to distribution would be among its Risk Factors in its S-1 filing.
Imagine booking a gown for a wedding, prom or gala and finding out two days before the big day that you need to find something else to wear.
To RTR’s credit, the company does take steps to make sure customers are satisfied with their outfit, including sending a free backup size of the dress and having the option of renting another dress as a second backup for an additional fee. The times I’ve used Rent the Runway, I’ve never worried about the dress not fitting.
Receiving the outfit and returning it is also easy. RTR delivers the package to your door and includes a pre-printed shipping label for when you drop off the package at UPS. Customers in cities like New York and San Francisco can also pick up and drop off their rentals at the company’s brick-and-mortar stores.
When RTR works, it’s amazing. But its business depends on customers trusting that they will receive their rentals on time; however, that trust can easily be eroded with delays. Rent the Runway needs to fix this problem fast.
Illustration Credit: Li-Anne Dias
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