Good morning! Women are buying Oura rings, Trump's cabinet pick faced scrutiny—from his own mom, and Rent the Runway marks 15 years. Have a productive Monday.
- Don't stop believing. Rent the Runway hit 15 years old last month. At the helm of the business still is CEO Jenn Hyman, who cofounded the clothing rental service when she was a 27-year-old business school student.
Hyman has seen Rent the Runway through its highs—like the late 2010s, when its unlimited subscription service had started to become ubiquitous in certain markets—and its lows, like the cratering of its business during COVID shortly thereafter. In the years since, Rent the Runway has struggled, and a true attempt at a turnaround is still in its early days. Through it all, Hyman has asked herself two questions to determine if she should remain at the helm of the business: Is she tired? And, more importantly, "Do I still believe?"
The first problem is a fixable one, and while Hyman says she's been deeply tired at many points along the way, that exhaustion has never been enough to compel her to hand over her company to someone else. "It means I need to change things about how we operate, to make this re-energizing again," she says.
To do that, Hyman started this year with a new strategy. "I entered the company in 2024 as if I was a new CEO," she says. "If I were a new CEO, how would I view Rent the Runway today?" She reorganized the company to return to its roots as a collection of "cross-functional startups" and eliminate some bureaucracy she says she felt she was supposed to take on as the company matured. Instead, she wholeheartedly embraced "founder mode." "The number one thing that I wanted to change was pace and agility. It was my belief that we had gotten into patterns that were slowing us down," she says. She hired new executives, including a CMO to invest in marketing after crisis-induced years of ignoring it in favor of business fundamentals.
Rent the Runway is now up against a sea of competitors in the category it invented, from Nuuly to retailers' and brands' own rental services; a stock price down more than 90% from its 2021 IPO high (which Hyman admits is "abysmal," but argues is separate from the health of the business itself); and consumer preferences forever altered by the pandemic.
Some changes to the business have helped with investor skepticism; once an asset-heavy business, Rent the Runway is now a capital-light business, having convinced brands' to view the platform as a marketing channel (the average Rent the Runway customer tries 45 brands a year and purchases from those brands 80% of the time). Thus brands now provide merchandise for free for three-quarters of its inventory, rather than requiring Rent the Runway to purchase huge quantities of clothing. Hyman says the $320 million company is profitable, despite all of the noise about its challenges.
Through it all, Hyman says she's stuck around because her answer to the question "do I believe" has always been "yes." "It's hard to be at a business that's in the middle of a transformation," she acknowledges. But she's staying put "as long as it's fun."
Emma Hinchliffe
emma.hinchliffe@fortune.com
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