Rent the Runway founders Jennifer Hyman and Jennifer Carter Fleiss got a major boost for their company today in the form of a $15 million from Silicon Valley venture capital firm Kleiner Perkins. The online service enables customers to rent designer dresses for a major discount. This cash flow is expected to truly make the company become the “Netflix of fashion”.
RTR will now be able to add about 20 new designers to its offerings including Z by Zac Posen and Narcisco Rodriguez as well as cheaper gowns, according to Reuters.
The company’s business model is being well received because it plays in perfectly to our society of having access to everything (immediately) but not neccessarily needing to own it. Huffington Post writer Vivian Weng wrote recently “From a digital media standpoint, cloud computing has blurred the line between ownership and rental. If you as a consumer can access your favorite movie at any time, do you actually care whether the file is stored on your computer or on a far-away server owned by Amazon? I believe most people do not.”
The Rent the Runway girls are simply applying that rule to clothes. Yes, many women do like to own a lot of clothes but if they can get a couture dress for a tenth of a regular cost that will most likely make their event even more special, they will probably do it. This is evident in that they are not just appealing to college students and young, 20-somethings but to women up to age 45.
Of course there are some clothing items women will want to own forever like their wedding dress. However, the company has just expanded into bridal gowns because, as most of us know, most of us would rather not keep any of our bridesmaids dresses, even if they are Vera Wang.
The company had revenue of $6 million in 2010 and is projected to bring in about $20 million this year, according to Reuters.