Versace For Rent?! - Exclusive Week

By Jess Goulart

Photo courtesy of Justin Hee.

The most successful business is one that targets a consumer need and provides a solution that is both financially reasonable to the buyer, and profitable to the seller. That’s exactly what Jenn Hyman set out to do in 2009, when she and Jenny Fleiss co-founded Rent The Runway (RTR), a company that allows shoppers to go online and rent luxury garments from designer labels for single wear use, rather than having to purchase them.

Both graduates of Harvard Business School, the pair’s raison d’etre is to give “every woman her dream closet – a new dress for every occasion,” and to allow designers to “get their pieces onto young, fashionable women and build an addiction for designer fashion.”

On RTR, women can browse dresses by occasion, designer, color, fit, etc. After they’ve made their selection, they can rent the piece for 4 or 8 days, plus any necessary accessories like shoes and make up.

Offering expert customer service, RTR allows you to rent your size plus another for free, and add a third size for cheap. They suggest any intimates you’ll need, send your order with a pre-printed return label and box, and handle all the dry-cleaning for you. On the site, style reps wait at the ready to offer suggestions and advice. In an inventive move, women can also use the “Our Runway” feature to look at real-life photos of women with their same body type wearing the clothes.

Hyman tells Business Insider that RTR also offers an alternative to women who buy a dress, hide the tags, wear it once and return it a practice called “wardrobing.” This problem is so rampant in high-end department stores, Bloomingdales has recently begun placing large plastic tags that can’t be concealed on dresses that cost over $150. The company won’t accept a return if the tag has been removed.

Despite the fact that RTR is certainly helping to put a stop to wardrobing, high-end department stores are nervous because of the company’s rapid success and growth rate. CNBC names RTR as one of the top five “disruptors” to the retail industry, innovators who are “changing the market and poised for rapid hypergrowth,” and multiple sources report high end stores have threatened to pull designers from their floor if that designer is featured on RTR. Though these stores are clearly motivated by fear, is there some truth to a luxury brands worth being diminished if it’s available to the masses? Should designers be wary of RTR?

Kariem Younes, a widely respected independent designer and design consultant based out of New York City, tells BTR absolutely not.

“Just because more people are enjoying it, doesn’t mean a garment is losing value. That’s like saying that a masterpiece painting is less valuable if more people can see it, which it’s not.”

A graduate of FIT and The London College of Fashion, Younes boasts an extensive list of high profile clients, including past work with Devi Kroell, Lisa Kornman, Micheal Kors, and Lexdray. As a design consultant who works closely with developing brands, Younes says he would encourage his clients to become a part of RTR and other companies like it, especially if they are just starting out.

“RTR grants brands a greater audience, and that’s what you want. You want brand recognition and you want accessibility as much as possible,” says Younes. “Of course, you need to meet a premium, but if you can get more people talking about your brand it actually raises the value. Besides, fashion at its core is really art, and art is meant to be enjoyed. So people that can’t afford a $7,000 gown, this gives them a chance to be a part of your art.”

With department stores fighting a serious business decline over the last few years and Morgan Stanely predicting dismal sales for this holiday season, Younes says high-end retailers are resorting to “scare tactics and bullying that should be ignored.” He adds that “the department stores aren’t really going to be that hurt by the whole thing. Somebody who was going to purchase a piece before is still going to purchase it, regardless of its availability to the masses. It’s like having access to hundreds of movies on Netflix, but still wanting to buy certain DVDs.”

Younes is also adamant that designers remember Department stores are selfishly motivated. “Bullying and harassing is less about customers,” he points out, “and more about maintaining their own status. And, frankly, they have to learn to evolve.”

Fusion of the two types of businesses into a new shopping experience does appear imminent, as a recent partnership between Macy’s Inc. allows shoppers to take dresses for a “test drive” with RTR before purchasing them at Bloomies. A wise business decision, it’s no doubt better to be on this band wagon than left behind in the dust of retail’s yesteryear – just ask Blockbuster.

For their part, Rent The Runway opened up their first permanent brick and mortar showroom at Henri Bendel’s famous Fifth Avenue building. As Bendel, Barney’s, and Bergdorf are the top three names in luxury Department stores, the partnership is telling of a cooperative future.