Good morning! Women are buying Oura rings, Trump’s cabinet picker faced scrutiny from her mother, and Rent the Runway is 15 years old. Have a productive Monday.
– Don’t stop believing. Rent the Runway turned 15 last month. At the helm of the business is CEO Jenn Hyman, who co-founded the clothing rental service when she was a 27-year-old business school student.
Hyman has seen Rent the Runway at its height, like in the late 2010s. unlimited subscription service it started to become ubiquitous in certain markets, and its lows, like the cratering of its business shortly after during the COVID era. In the years since, Rent the Runway has struggled, and any real attempt to turn it around is still in its infancy. All in all, Hyman has asked himself two questions to determine if he should stay at the helm of the business: Is he tired? And, more importantly, “Do I still believe?”
The first problem is a fixable one, and while Hyman says he’s been very tired at various points along the way, that weariness has never been enough to force him to turn his company over to someone else. “It means I have to change things about the way it works to get this back on track,” he says.
To this end, Hyman has started this year with a new strategy. “I joined the company in 2024 as the new CEO,” he says. “If I were the new CEO, how would I watch Rent the Runway today?” He reorganized the company to return to its roots as a collection of “cross-functional startups” and cut out some of the red tape, which he says he felt he needed to take on as the company matured. Instead, he embraced her wholeheartedly.”creative mode“. “The first thing I wanted to change was the pace and speed. My belief was that we got into patterns that slowed us down,” he says. He hired new managers, including a CMO investing in marketing after neglecting business fundamentals in the crisis years.
Christopher Goodney/Bloomberg via Getty Images
It’s now up against a Rent the Runway a sea of competitors in the category he invented, from Nuuly to rental services for retailers and brands; the stock price is down more than 90% from its 2021 IPO high (Hyman admits it’s “malicious” but says it’s separate from the health of the business); and consumer preferences have been forever changed by the pandemic.
Some changes in the business have contributed to investor skepticism; once a multi-asset business, Rent the Runway is now a capital-light business, having convinced brands to view the platform as a marketing channel (the average Rent the Runway customer tries 45 brands a year and purchases 80% from those brands). time). As such, the brand now offers free merchandise for three-quarters of its inventory, rather than asking Rent the Runway to purchase large quantities of clothing. Hyman says the $320 million company is profitable, despite all the noise about its challenges.
Through it all, Hyman says he’s stuck because the answer to the question “do I believe” has always been “yes.” “It’s hard to be in a business that’s in the middle of a transformation,” he admits. But it remains “as long as it’s fun.”
Emma Hinchliffe
emma.hinchliffe@fortune.com
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PART WORDS
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