The sharing economy is moving into our bedroom closets.
We already apply this idea to transportation (Uber vs. taxi) and vacation accommodations (Airbnb vs. hotel). Now, thanks to a growing number of e-commerce companies, the ability to share goods and services is being applied to our wardrobes through programs that offer clothing rentals for a monthly fee.
It’s the kind of clothes swapping that women have been doing offline since, likely, as long as there have been garments, says Emily Fox, director of marketing communications at LeTote, a San Francisco e-commerce startup. “Women are tired of what’s in their closets; they want some variety,” she says. “So, we created access to this unlimited closet at their fingertips.”
LeTote, which was founded in 2012 and was part of Y Combinator’s accelerator program, offers shoppers a selection of clothing and accessories from $59 to $79 a month. LeTote also has a program for maternity wear and it recently expanded into China. So far, the startup has raised $62 million from such investors as Andreessen Horowitz, Google Ventures, Azure Capital Partners, and others.
Rental clothing has customarily been associated with tuxedos for proms or other one-off events where a person doesn’t want to own the garment. But that began to change in 2009 when New York-based Rent the Runway debuted its service to rent special-occasion wear and accessories for women. Two years ago, the company decided to expand its business to include all clothing, through three services costing $30 per item or $89 and $159 a month, depending on frequency of new shipments. Shoppers can choose from more than 500 brands, including upscale labels like Proenza Schouler, Red Valentino, Cushnie et Ochs and Peter Pilotto.
In an interview with Fortune in 2016, Jennifer Hyman, Rent the Runway’s co-founder, likened the service to Netflix’s DVD rentals: get a number of movies and use as long as you like (depending on your subscription plan); send them back to get more. “Given that Netflix is a $60 billion company—and we don’t have to watch TV or movies every day, but we do all have to get dressed—the potential for Rent the Runway was 10 times bigger than I ever thought,” she said.
(Of course, at between $8 and $14 a month, a Netflix subscription runs far below that of Rent the Runway.)
In February, Rent the Runway received $21 million from Blue Pool Capital, which is run by Alibaba founders Jack Ma and Joe Tsai, bringing the company’s total venture funding to just under $200 million, according to Crunchbase.
Despite having full closets, Americans experience “wardrobe panic” 36 times a year, according to a March study by personal … Next Page »