Rent the Runway, the online dress hire business aiming to become the 'Amazon of rental'

Here’s something I learnt as a student: you tend not to want to borrow clothes from the girl who’s willing to lend. Don’t get me wrong – I’m all for sharing, just not if we’re talking lovers, french fries or fashion.

I was reminded of this when I tried out Rent the Runway, the dress-rental website that in five years has become a major disruptor in fashion circles, and has tech analysts predicting it could shortly be valued at $1bn.

Like so many smart ideas, it seems obvious in hindsight. After all, men have been hiring tuxedos for decades, and most women’s wardrobes tend to display an inverse correlation between the high cost of a garment and the number of times it actually gets worn.

For co-founder and CEO Jennifer Hyman, the penny dropped when she saw her sister splurge on a four-figure Marchesa gown she could ill afford for a friend’s wedding. As Hyman recalls: “She already had a closet full of options. The issue, she relayed, was that she had already been photographed in all of the dresses she owned and those pictures were all over social media, making her feel as if she couldn’t wear them again.” And just like that, Hyman hit on a solution: a designer fashion rental company.

A social studies major raised in the New York suburbs, Hyman previously worked for Starwood Hotels and Resorts and WeddingChannel.com, and was at Harvard Business School when she had her eureka moment. She shared the idea with a friend, Jennifer Fleiss, and together they bought and loaned dresses at Harvard and Yale to see if women would rent them, and whether they’d then go a step further and rent them without first being able to try them on. The answer was a resounding yes and within a few months, the pair had raised more than $15m by cold-calling investors.

Moving the operation to New York, they appointed “runway reps” on college campuses, winning a core following of style-savvy young women who have come of age in rented frocks, describing their adventures alongside selfies in the website’s review sections. They aren’t the only “renters”, though. According to Forbes, the site was responsible for dressing a jaw-dropping 85% of the women who attended President Obama’s second inauguration.

While I didn’t have a presidential knees-up in my diary, I did have an uncharacteristically glamorous week looming, including a Manhattan rooftop party and a girls’ night out, with a flying visit to Nashville in between. It seemed a good enough excuse to try out a service that five million women across America have already signed up for.

Logging on, I plumped for an “olive peep dress” by Opening Ceremony (retail $420, rental $35), a sleek Moschino Cheap and Chic LBD with cut-away lace panels (retail $595, rental $85), and a Missoni “Neapolitan mini” (retail $785, rental $35). They arrived by courier the following afternoon, packed in a branded dress carrier that made the service feel reassuringly high-end.

The Opening Ceremony dress was a dud but the Missoni was party-perfect and I was out of the door in moments. Only on the subway did I notice the splotch of what looked like dried soup. How exactly had this garment been cleaned? Its fabric suddenly felt very itchy.

“Our goal has always been to give women access to that feeling of empowerment and thrill that comes from wearing designer fashion,” Hyman explains. What women get up to when they feel empowered (“epic nights” are a review staple) will make her company one of the biggest dry cleaners in America when it moves into a 160,000sq ft warehouse in New Jersey. Four times the size of its existing space, it will house 22 dry cleaning machines along with jewellery repair and seamstress departments.

In all, Rent the Runway circulates more than 65,000 dresses, 60% of which are sent out again the day they arrive back at the warehouse. Some 200 employees assess cleaning and repair needs, and in this way, garments that are not designed to be worn more than a few times wind up being sent out an average of 30 times. Was that how my Missoni came to be such a steal?

There are plenty of names you won’t find on Rent the Runway, among them Chanel, Prada and Marc Jacobs. Hyman dodges the question of whether certain designers refuse to sell to them, though she admits some were initially hesitant. They’ve since come to realise what a powerful marketing channel Rent the Runway can be, she says, giving them access to customers 20 years younger, on average, than their core demographic. Because Renters are more adventurous than buyers, the company invests in lines that other retailers don’t buy into so deeply. Marchesa, Moschino and Narciso Rodriguez have even collaborated on exclusive capsule collections.My loaner Moschino was cute enough that I overcame my post-Missoni squeamishness but in a hipster dive bar in East Nashville, it didn’t seem quite the thing, so I figured it was time to try Rent the Runway’s stylist service, available near the Flatiron building and at its lower Manhattan headquarters, where I pitched up for my 45-minute consultation ($25).

Clients are encouraged to think of their stylists as “equal parts fashion expert, confidante, and friend who’ll make you look and feel amazing”. Mine seemed more like the disinterested family member you’ve emotionally blackmailed into tagging along but she did help with zippers and steer me towards a Tibi minidress (retail $575, rental $85) that I’d never have tried on were I buying. Part-quilted jacket, part-diving suit (neoprene is currently trending among renters), I was sceptical but it won me what might just be the ultimate New York City compliment: praise from a bouncer, in this case a cool young dude who seemed disappointed to hear that the website didn’t cater for guys – yet.

That soon could change. “The long-term goal is for Rent the Runway to become the Amazon of rental, allowing customers to rent luxury and seasonal items across all categories,” Hyman says. They’ve already branched out into accessories.

On a recent Saturday, the new Flatiron store bustled with women. In the background, Lorde was singing about how “That kind of luxe just ain’t for us”. Someone needs to tell her about Rent the Runway.