Looking good has never been so easy! Rent the Runway has big plans for 2017 and now has even more capital to cement its place as a leader for fashion geared towards millennials, by announcing today a $60 million round E of funding led by Fidelity Management. It plans to use some of that money to move its NY flagship boutique to a new 5,000-square-foot space at 30 W. 15th Street in Manhattan that will replace its current Flatiron District store. It will also soon open a 3,000-square-foot boutique in struggling department store chain Neiman Marcus’ San Francisco store, proving they’re serious about making 2017 their biggest financial year.
For those who still don’t know, Rent the Runway is an online service that provides designer dress and accessory rentals. Thought its online service and apps it offers more than different 65,000 elements for members to rent for a wedding, graduation or other social events. Recently, the firm has had its sights on establishing a physical presence providing its its customers a place to see, feel and try on dresses and other high-end items. There is more to it than just that, a je ne sais quoi that is integral to true fashion feelings, a sensation, or a sense of place, Rent the Runway President Maureen Sullivan told CNBC last month. “It’s more like a club, or a place that you feel like you’re kind of a member of,” Sullivan said.
The firm loaned its customers an estimated $1.35 billion worth of high-end items in 2015, and expects to eclipse $100 million in revenues by the end of 2016.
Rent the Runway, which enables customers to rent designer apparel and accessories from labels including Nicole Miller, Badgely Mischka and Cynthia Rowley, touts more than 6 million members across the U.S
The New York City-based startup, co-founded in 2009 by Harvard Business School graduates Jennifer Hyman and Jennifer Fleiss, has now raised more than $190 million in venture financing, and led by Fidelity Investments it has able to raise another 60 Million though stage E financing.
Companies used to seek investments in a series of rounds starting with a seed stage investment, and then go from an array of rounds, or series, called A through C, as needed. Most companies go public or get acquired by series C or D. More and more however, you see private companies do multiple rounds of investments – even past series D – to stay private as long as possible as to avoid the public markets. This keeps the model “in house” and allows firms to retain their business model and essence while still quickly raise money for expansion.
This new round of funding will be used to accelerate the company’s growth as it continues scaling its menu and catalog of items to rent, expand is subscription service and offer a physical sense of belonging though it real estate presence.
“We are coming off of our most successful year since the company’s inception, with the launch of our Unlimited subscription business, our partnership with Neiman Marcus and our new flagship store in New York,” said Jennifer Hyman, Co-founder and CEO of Rent the Runway. “We are excited to bring on Fidelity as a partner as we continue to disrupt the closet and remain at the forefront of the access economy.”
The company will also focus on growing its Unlimited Subscription business, which launched this spring and gives members access to $40,000 worth of designer clothing per year for a fixed monthly price.
Rent the Runway will also continue expanding the company’s brick and mortar presence which includes stores in six cities, including San Francisco, where the aims to establish new retail rules by opening a store within a store and focusing on the prestige and luxury, of fashion retailer Neiman Marcus while enjoying its multi-brandedness, and omni-channel supply chain. The company will also use the funding to continue building its operational capacity, by investing its internal process through its 150,000-square-foot fulfillment center, where each item is inspected, dry cleaned, and steam-pressed all with experts and cutting edge industrial technology.