What to Know
Rent the Runway stops taking new customers.
The company has been running into inventory management and supply chain issues.
Customer complaints have become more and more widespread.
Rent the Runway isn’t accepting any new subscribers or new event rentals at least until Oct. 15, as the clothing platform runs into a slew of inventory and supply chain issues and struggles to keep up with customers’ demands.
Co-founder and CEO Jenn Hyman sent an email to current subscribers on Friday morning that said, in part:
“I’m reaching out to further update you on delays that some of you have experienced in receiving your orders over the last few weeks. The delays, which began Sept. 13, are due to unforeseen issues associated with a significant software transformation that we are executing in our fulfillment operation. Our technical team is working to fix these issues as quickly as possible. We expect this upgrade to be completed by Oct. 15 or sooner, at which point you will experience much improved availability of styles.” ...
“So that we can focus entirely on you, our current customers, while we fix these issues, we will not be accepting new subscribers or new event rental orders to be delivered before Oct. 15.”
Hyman said current subscribers could still expect shipment delays of an additional one to two days, up until Oct. 15, advising people to order “a few days in advance of your normal schedule.”
A representative from the company didn’t immediately respond to CNBC’s request for additional comment.
Last week, Hyman had sent an email to existing customers, as complaints started to roll in about out-of-stock sizes and late order deliveries. She said Rent the Runway would be making “significant changes to our operation” in the coming weeks, promising customers “you should feel this improvement within the next three weeks.”
The company had also recently started handing out upwards of $200 in cash to customers who never received their orders.
Business of Fashion reported earlier this week that Rent the Runway’s head of supply chain, Marv Cunningham, will be stepping down at the end of the month, amid the turmoil.
Rent the Runway earlier this year received a new round of financing that boosted its private-market valuation to $1 billion. The company has now raised more than $330 million.
The business, which offers monthly plans costing $89 and $159 — depending on the frequency of exchanging clothing and accessories — appeals to women who want to avoid wearing the same thing twice, or who want the flexibility to try new and designer brands.
Rent the Runway had been growing its physical footprint and opening more standalone locations, where women can swap out items and pick new ones, instead of having to wait on returns to be accepted via mail. It has also partnered with WeWork and Nordstrom to put drop-off boxes in some office and retail locations.
— CNBC’s Megan Graham and Angelica LaVito contributed to this report.
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