NEW YORK, United States — 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 are back to normal as of Tuesday morning, “a few days ahead of schedule.” The company had previously said it was gearing for October 15.
The fashion-rental company is trying limit the damage after subscribers last month said that outfits they ordered for special events didn’t arrive on time or were canceled with no warning. In response, 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 received 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 its New Jersey distribution center. In total, 14 percent of Rent the Runway’s subscribers and 6 percent 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’s 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 over $1 billion and has raised more than $500 million in venture capital funding from investors including Franklin Templeton, Bain Capital Ventures and Temasek Holdings. It’s grown rapidly into a subscription business, with most of its customers now paying a monthly fee of $159 to rent items ranging from Kate Spade dresses to Oscar de la Renta earrings. The service has also starting renting out children’s clothing and home decor.
By Kim Bhasin; editors: Jonathan Roeder and Anne Riley Moffat.