Rent the Runway (RTR) is at a crucial juncture as it actively works to reshape its growth path. The company, known for its “Closet in the Cloud” concept, revealed its second-quarter performance results, showing a 4.2% revenue increase. CEO Jennifer Hyman highlighted notable improvements in customer experience and site performance, which she described as generating a “palpable energy driving RTR.”
Rent the Runway’s revenue growth in the second quarter stood at $78.9 million, up from $75.7 million in the same period last year. This growth comes despite a 6% decline in active subscribers, attributed to reduced promotions. To counter this, RTR is focusing on enhancing its special event reserve business, which saw a 10% order increase in July and a 20% rise in August. In a notable development, new customer growth surged by 50% year-over-year without additional marketing expenditure.
Reserve Business Momentum
“What you’re seeing in our results is momentum,”
CEO Jennifer Hyman stated during the earnings call. She emphasized the growing effectiveness of the Reserve segment, which experienced significant order increases over the summer months. The focus on customer experience and inventory management has played a critical role in this success.
Additionally, RTR is leveraging enhanced SEO strategies to increase organic traffic and customer engagement. Hyman pointed out that these improvements, along with revamped marketing and content strategies, are designed to set the company up for a successful second half of the year. The introduction of monthly icon campaigns and a renewed college ambassador program are part of this initiative.
Expansion and Marketing Efforts
RTR is also working on boosting its in-person presence through a Southeast roadshow and mobile tour focusing on universities with strong Greek life and sports culture. This fall tour aims to attract the Generation Z audience and further increase market share. Hyman noted that in past events, they have seen significant interest, with hundreds of women queuing to participate.
The company has three primary goals: expanding the Reserve business, increasing organic traffic, and deepening customer relationships. Improvements in customer experience have led to the re-engagement of former customers. Hyman emphasized that over the past three years, the focus has been on cost and profitability, but the company has now repositioned itself for growth.
Rent the Runway’s future growth strategy involves enhancing its product-market fit and increasing organic traffic. Hyman expressed confidence in the company’s momentum across various business aspects. She noted that brand awareness and love for RTR are very high, and she is optimistic about the company’s prospects for the second half of the year.
