Rent the Runway reopens after supply-chain crisis

October 10, 2019 0 By JohnValbyNation

Rent the Runway says its business is working normally again after a cascade of delayed and canceled orders angered customers.

Rent the Runway Chief Executive Jennifer Hyman said operations were back to normal as of Tuesday morning, “a few days ahead of schedule.” The company had previously said it was aiming for Oct. 15.

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The fashion-rental company was trying to limit the damage after customers last month said outfits they ordered for special events hadn’t arrived on time or had been canceled with no warning. Rent the Runway, which said implementation of new software disrupted its sorting system, pledged to refund some customers and give $200 in cash to others whose orders were never shipped.

Services were halted for 11 days, with new subscriptions and individual orders frozen during the downtime, causing a short-term revenue hit. New customers were temporarily barred from registering and put on a waiting list. They will now be processed. Meanwhile, those existing customers eligible for cash were sent their payments last week as the warehouse issues were resolved.

The disruption began in mid-September after Rent the Runway’s new racking system for clothes went into effect at the company’s New Jersey distribution center. In total, 14% of Rent the Runway’s subscribers and 6% of customers who use the service for one-off events were affected.

The company’s top supply-chain executive stepped down as angry customers flocked to the service’s social media pages to voice dismay about being stranded without their planned garments for weddings and galas.

Founded by Hyman and Jennifer Fleiss, who is now an executive at Walmart Inc., Rent the Runway has found a following sending borrowed clothes for women to wear for events. The company is valued at more than $1 billion and has raised more than $500 million in venture capital funding and debt from investors including Franklin Templeton, Bain Capital Ventures and Temasek Holdings.

It has grown rapidly into a subscription business, with most of its customers now paying a monthly fee of $159 to rent items that can include Kate Spade dresses and Oscar de la Renta earrings. The service has also started renting out children’s clothing and home decor.