You don’t need to own your clothes for the rest of your life, Rent the Runway CEO Jennifer Hyman says.
On the latest episode of Recode Decode, hosted by Kara Swisher, Hyman explained to Recode’s Kara Swisher and Jason Del Rey how the company she co-founded in 2009 has attracted six million paying customers.
“Around the year 2000, businesses around the country went ‘business casual,’” she said. “Prior to 2000, men and women spent the same amount of their take-home income on dressing for work, around 2.5 percent. After this cultural revolution changed, women started spending between 7.5 and 10 percent of their take-home income [on work clothes].”
Initially, those customers rented items on demand, as Rent the Runway focused on dresses and accessories for special events like weddings and parties. In 2016, the company launched a subscription service for clothing that women could wear to work, which already represents 25 percent of its revenue.
“What our on-demand customer delivers in five years, our subscriber delivers twice that in six months,” Hyman said. Shortly after this interview was recorded, Rent the Runway announced that it had raised $60 million in a new funding round led by Fidelity.
She compared fashion to the auto industry, except decades in the past. Rather than having their fashion choices limited by what retailers put on the rack, she argued, women should have other options — but that doesn’t mean retail will go away, either.
“What’s interesting about the transportation market is that you’re often dabbling in multiple categories,” Hyman said. “The same person who might own a car is still using Uber, is still using a taxi, still might go to Avis on a business trip and rent a car.”
“And maybe they’re shifting the distribution with which they consume all these products, but it’s not either/or,” she added. “Same thing in clothing. We’re still in the world of 80 years ago, where everything that you own, you have to own it for the rest of your life.”
If you like this show, you should also sample our other podcasts:
- Recode Media with Peter Kafka features no-nonsense conversations with the smartest and most interesting people in the media world, with new episodes every Thursday. Use these links to subscribe on iTunes, Google Play Music, TuneIn, Stitcher and SoundCloud.
- Too Embarrassed to Ask, hosted by Kara Swisher and The Verge's Lauren Goode, answers the tech questions sent in by our readers and listeners. You can hear new episodes every Friday on iTunes, Google Play Music, TuneIn, Stitcher and SoundCloud.
- And Recode Replay has all the audio from our live events, including the Code Conference, Code Media and the Code Commerce Series. Subscribe today on iTunes, Google Play Music, TuneIn and Stitcher.
This article originally appeared on Recode.net.