Rent the Runway would like you to reduce, rent, recycle, when it comes to fashion.
The company, which offers consumers a subscription plan that lets them borrow designer clothes, announced on January 14, 2020, that it will create a line of clothes made from recycled materials in an effort to be more sustainable and climate-conscious.
Rent the Runway, based in New York, is currently valued at $1 billion. It claims to reduce waste by allowing customers to share clothes rather than own them. The fashion industry generated 11.2 million tons of textile waste in 2017 alone.
Rent the Runway is the latest spin on the “sharing economy.” The sharing economy allows consumers to pay for access to a service, ideally at a more affordable price by sharing with other consumers. Uber, Lyft, and Airbnb are other examples of sharing economy companies.
It has also inspired traditional brick-and-mortar retailers such as Urban Outfitters and Bloomingdale’s to try their hand at rentals, which could transform the industry.
How does renting clothes work?
Rent the Runway was co-founded by Jennifer Hyman, the company’s chief executive officer, while she attended Harvard Business School in 2008. The business began as a way for women to rent designer pieces for events, in the way that a man might rent a tuxedo for an event, according to The New Yorker.
Since its founding, Rent the Runway has evolved into a subscription business that allows customers to pay a monthly fee of $159 to rent four pieces at a time and return them when they choose. This service has attracted 100,000 paying subscribers. (The company reportedly has more than ten million members, defined as people who have created an account.)
The largely millennial customer base wants access to designer clothes without having to own those clothes and eventually dispose of them, according to Hyman.
Rent the Runway has allegedly been sustainability-minded in the way it operates as a company since its founding. The company ships clothes in a patented, reusable garment bag rather than plastic packaging or cardboard boxes, according to Rent the Runway’s website. The company also sells or donates items that have exceeded their shelf lives.
Waste in the Fashion Industry
“Fast fashion” clothing items are the cheap but disposable items that you can find at stores such as Forever 21, H&M, and Zara. These companies produce more and more clothing and sell that clothing at cheap prices, typically by using poor quality materials and hiring inexpensive labor abroad.
The idea behind fast fashion is that consumers buy more cheap clothing and then dispose of it after wearing it a few times, according to Town & Country. In 2018, consumers on average purchased 68 items of clothing and wore each piece of clothing an average of 7 times.
Fast fashion is increasingly contributing to waste in the fashion industry. The fashion industry emits 10% of the total global greenhouse gas emissions, according to World Bank. The fashion industry also uses 93 million cubic meters of water each year, which is enough water for 5 million people.
Shoppers today buy 60% more clothing than they did in 2000. Of the clothing that is manufactured, less than one percent of it is recycled, according to the World Bank.
Other clothing companies in the sharing economy
Rent the Runway has inspired other clothing companies to get into the sharing economy and attempt to decrease the waste of the “fast fashion” industry.
Urban Outfitters, which owns Anthropologie and Free People, started its own $88 a month subscription service called Nuuly which allows customers to rent six pieces at a time. Meanwhile, Macy’s, Bloomingdale’s, and Banana Republic have also announced clothing rental options of their own.
Companies such as Frank & Oak, Stitch Fix, and Trunk Club charge a fee to send users a curated box of clothing, from which customers can choose what they want to keep and what they want to return.
If sustainability is important to you, Stash offers climate-conscious ETFs and single stocks for you to invest in.
Additionally, Stash offers single stocks and ETFs in the retail sector. Investing in different sectors, like the retail sector, is one way to diversify your portfolio. Diversifying is part of the Stash Way. When you’ve diversified your portfolio, it will hold a variety of investments that are not all subject to the same market risks, including stocks, bonds, and cash, as well as mutual funds and exchange-traded funds (ETFs).