Rent The Runway ($PRIVATE:RENTTHERUNWAY) is preparing for a downsized operation in the midst of Coronavirus uncertainty. The designer clothing rental service has five brick and mortar locations in addition to its central e-commerce platform. All stores are currently closed, and RTR doesn't know if they will reopen. Last week, the company laid off its entire retail staff via Zoom.
Since the beginning of the month, job listings have been slashed 68%. The number is now at 20, the lowest it’s been since we started tracking the company’s job openings in 2016.
The company is in a tricky spot with most of its customers working from home. On one hand, a subscription to luxury brands lets them enjoy shopping without breaking quarantine. On the other, why spend the monthly fee to get all dressed up with nowhere to go? Based on RTR’s Facebook mentions, people seem to agree with the latter argument.
Over just a few weeks, the Facebook ‘Talking About’ count for Rent The Runway has dropped from 6,010 to 233, a 96% decrease. RTR’s ratings in the Apple App Store have been falling in step.
According to The Verge, Rent The Runway sent a mass email to its customers earlier this month regarding Coronavirus concerns. “First, according to Harvard Health, there is currently no evidence that COVID-19 can be transmitted from soft surfaces like fabric or carpet to humans,” the email reads. “In addition, our cleaning agents and practices are designed to kill viruses such as the common cold and flu. While scientific information is still developing, we have no reason to believe that our processes are ineffective against COVID-19.”
Rent The Runway has been a magnet for controversy in recent years. Borrowing designer clothes without taking on the full financial burden of owning them was a novel concept when the company launched in 2009, to high-end consumers and investors alike. But the floodgates opened in 2015 after the company lost several of its top executives due to its allegedly hostile work environment.
A few years later, in an act of retroactive damage control, co-founder Jennifer Hyman published an opinion piece in the New York Times vowing to improve working conditions for her staff. The article begins, “I am ashamed to say that until recently I was part of the majority: I am the chief executive of a company that gave different benefits to different groups of employees.”
RTR bounced back and received a new round of financing that increased its valuation to the unicorn level of $1 billion in 2019. The platform now boasts over 100,000 subscribers and over 550 brand partnerships. But as the Coronavirus pandemic continues to wreak havoc, RTR’s future is uncertain and the employees are paying the price.
The Coronavirus outbreak has been taking a toll on clothing retailers, slowing factory manufacturing and sales and leading to mass layoffs. Neiman Marcus ($PRIVE_NEIMANMARCUS) is currently considering bankruptcy as COVID-19 causes more store closures. And even though DTC brands and subscription services seem to have less to lose to Coronavirus — with fewer physical locations and often smaller teams — they aren’t immune.
About the Data:
Thinknum tracks companies using the information they post online - jobs, social and web traffic, product sales and app ratings - and creates data sets that measure factors like hiring, revenue and foot traffic. Data sets may not be fully comprehensive (they only account for what is available on the web), but they can be used to gauge performance factors like staffing and sales.
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