• Rent the Runway is a new website that lets women rent dresses from high-end designers for about a tenth of their retail asking price.
• Although the launch has been met with enthusiasm, the business model does face a few risks. Fashion tends to have a short shelf-life compared to rental DVDs. The site is also invitation-only, which limits its customer base. There’s also the enormous customer service risk. If your Netflix movie arrives a day late, that’s one thing, but if the dress for your Saturday wedding comes the following Monday, Rent the Runway has a big problem.
• Retail stores in big cities have rented dresses for years, but the company believes its online convenience will create a surge in the market even though women won’t be able to try dresses on beforehand.

Facts & Figures

• The rentals run $50 to $200 for a four-night loan and are shipped directly to the customer.
• Each dress order includes a duplicate dress in a back-up size for no additional charge.
• More than 20,000 women signed up for the service for its first week.

Best Quote

“Here was this young girl who loves fashion and was willing to spend a good portion of her salary on a dress that she’s only going to wear once or twice, and I thought, there has to be a solution for this.” – Jennifer Human, Co-Founder of Rent the Runway