Rent The Runway's subscriber base is growing as the fashion rental company reworks its business model by offering more brands and debuting a new rewards program. Jennifer Hyman, CEO of Rent The Runway talks about the revamp.

New York

Rent the Runway has reported record levels of subscriber loyalty and active users, following a series of business model changes aimed at enhancing customer value and experience. The company has doubled its inventory, introduced 90 new brands, and improved its rewards program, which has contributed to increased engagement and growth.

CEO Jennifer Hyman stated that these changes have helped the company reach near break-even cash flow and positioned rental as a mainstream option for consumers seeking financial value. The company has also shifted its inventory model to revenue sharing and exclusive designs with brands, reducing upfront costs and fostering stronger partnerships. Social engagement has risen significantly, and Rent the Runway sees potential for further subscriber growth as renting becomes more widely adopted.

Rent the Runway's comeback plan

What a great morning today. It is you know record loyalty. So loyalty is the highest it's been in four years. Record active sub count record sequential growth in subscribers. We're feeling really really great about the corporate transformation we put into place. So something that's funny is Matt I think knows this habit of mine. I'm a stressed shopper. Whenever I'm stressed out I go shopping. But the problem is she's stressed a lot. Yes. Yeah. It's a big problem. But there's got to be a limit here. It's it is not a great moment for a consumer wallet. I'm wondering how rent the runway tends to behave in those kinds of environments. Do you find actually increased engagement because people shouldn't be buying as much as I've been buying the last two years. I think the tailwinds for rental and resale are higher than they've ever been because our business is about financial value. The customer is getting thousands of dollars worth of clothing per month for a really low price. Our subscription price points start at sub 100 dollars. We have different kinds of programs for different kinds of customers. And I think that for the customer who's still going into work she has to have a ride in her wardrobe. She wants to look great. This is the best way to do it from a financial standpoint. So as tariffs might affect the industry as people get more concerned with pricing saving money via rental and resale I think is going to boost the rental industry overall. Is this by the way a recession play. I mean is that what's happening here because I don't know much about the business of women's fashion. But I look at your stock over the last five years it's been crushed over the last three months. It's doubled. So is that because everyone's saying oh we're going to go in a recession. I can't buy my I don't know Dior or I don't know the right YSL. Right. And so I'm going to rent it instead. I mean I think that our business really proved out in 2024 that the unit economics makes sense and this business works financially. We brought the business to nearly free cash flow break even. And then 2025 was really about proving to the world that we can grow. And how are we focused on growth. We've doubled our inventory this year which has led to huge growth in loyalty. We have made huge improvements in product which are improving the customer experience. And we've kind of driven the business back to a much more authentic way of communicating with our customers which has driven up social engagement by 163 percent. So we're not investing more in marketing but we've changed the way that we talk to our consumers. And that's having a positive effect. So interesting to me when you talk about typical retail companies you're talking about the brick and mortar presence. You're talking about the same store sales. But when it comes to you we talk a lot about you like a social media company. The idea here now that you have almost 150000 active subscribers. What does that look like in one year two years from now. Do you have a sense of how far that can go and what that consumer loyalty gets. One of the most exciting things about the business is that for so many years we were trying to convince the world the market that they should rent clothes. And now this is a mainstream behavior that women are considering for how they get dressed in their daily lives. And so the opportunity to have millions of subscribers in the future to rent the runway I think is really bright. Yeah I see. You gave me an idea to look it up on Instagram right. You have over half a million followers. That's where I shop the most and probably on Tick Tock. And I don't know these channels but can you turn those followers into subscribers relatively easily. I think that the way to do that is actually via inventory. So we've moved to a place in the market where we're out of the early adopter phase and now people are choosing where to rent based on the brands that we carry based on the styles that we have. So really investing in kind of doubling our new inventory adding 90 new brands this year kind of more than doubling the inventory from our top 25 brands and being a partner for our brands to help them acquire new customers. So brands are willing to work with us in this incredible way where 70 percent of our inventory is either via revenue share or via exclusive designs where we're not paying large amounts of capital up front. So we've really flipped the model of how a traditional retailer might work into one where we're revenue sharing with our partners on the performance of the inventory. All right. I think it's really a really cool business. And I mean you look amazing. So thank you. I kind of want to rent the runway but you don't have suits. We can up your tie collection. Yes. You know what. I want your wife as a customer. I want your friends as customers. Spread the word. I think that rent the runway is really grown based on organic adoption from the very beginning. Word of mouth and igniting the authenticity around the brand. The inventory helps do that because you look great. You get a compliment. You say I rented the runway and now you're going to be a customer.

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