Rent the Runway Offers Cash and Apologies to Angry Customers

NEW YORK, United States — Rent the Runway will temporarily stop accepting new subscribers and is issuing payments to some customers as the fashion rental platform scrambles to fix its snarled supply chain.

Over the last few weeks, hundreds of customers have complained on social media about not receiving rented items. Users left frantic comments on Rent the Runway’s Facebook page and on Twitter about missing dresses they’d chosen for events. Some also said they were unable to get through to the start-up’s customer service team.

“My dress never arrived and customer service isn't responding. HELP! My event is TOMORROW the 21st!!” a typical Facebook post read.

In a message posted on its website, Rent the Runway said customers whose rentals never arrived would receive $200 "in an effort to make up for this failure." An email sent to subscribers Friday morning from Chief Executive Jenn Hyman said the service would stop accepting new subscribers as it continues to work through software updates to its fulfillment operation.

"You rely on us for meaningful events in your life and to get dressed everyday. We realize we have let some of you down, and we need to fix it," Hyman wrote.

Earlier this week, BoF reported that Rent the Runway's head of supply chain is stepping down. Marv Cunningham, who joined the company in October 2018 as chief supply chain officer after working at Target and Amazon, is leaving his position at the end of the month.

In a statement, a Rent the Runway spokesperson confirmed the departure and said, "Marv has been an asset to Rent the Runway as we continue to scale our operations. We thank him for his contributions and wish him the best in his future endeavours."

Cunningham is a supply chain veteran, having previously served as the Target’s vice president of supply chain engineering; he also was Amazon’s director of fulfillment for five years. Cunningham did not respond to requests for comment.

The startup's latest hiccups, which was first reported by Recode, illustrate the difficulties Rent the Runway is facing in running a business that heavily relies on an error-free supply chain. The company has faced difficulties managing its logistics before. In July, as reported by The Wall Street Journal, the company sent out a mass "We're Sorry" email, telling users it would increase the number of customer service personnel and enhance its delivery operations.

But the latest problems received even more attention, in part because they overlapped with the Emmy Awards, with high-profile customers relying on the service to dress for the event.

One writer from HBO's "Last Week Tonight With John Oliver" chronicled the company's missteps on Twitter after she rented a dress for the Emmy Awards on Sunday night that never arrived.

That instance and others like it are particularly striking for Rent the Runway, which Jenn Hyman and Jenny Fleiss founded in 2009 on the premise that their platform would become a place where women could rent cocktail dresses for important events, instead of buying an outfit for a single use.

Since then, the company has flourished and is widely credited for pioneering the fashion rental space that now includes department stores like Bloomingdale's and brands like Urban Outfitters, Banana Republic and Ann Taylor. Its services include an "Unlimited plan," which allows users to rent four products at a time for $159 a month, as well as an "Update plan" for $89 that allows customers to rent up to four items monthly. Earlier this year, Rent the Runway debuted rentals of home goods with West Elm, and added children's clothing too.

On Friday, Rent the Runway tweeted that the company was doing an update to its system, which was why users were experiencing delays.

"We're in the process of upgrading our operation in order to make your Rent the Runway experience even better including more inventory & access. In the short term, these changes are causing shipment & customer service delays," it wrote.

Chief Executive Jennifer Hyman was responding to users on Twitter herself.

On Friday, Hyman also sent an email to subscribers, admitting the company was having a hard time keeping up with orders while it was "implementing significant changes."

"Upgrading systems while still running the business at full speed is complex," Hyman wrote in the email, which was seen by BoF. "We know that we will make some mistakes, so for the next month, if you have time-sensitive events, please order a few days earlier than you normally would. We are sorry, and we own this."

Many users say they hadn’t received the email, or any communication, from Rent the Runway.

Rent the Runway has a distribution centre in Secaucus, N.J., and opened a second processing centre in Arlington, Texas in July. It has raised over $300 million in funding and has a $1 billion valuation.

Cunningham is a supply chain veteran, having previously served as the Target’s vice president of supply chain engineering; he also was Amazon’s director of fulfillment for five years.

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