Rent the Runway Stops Taking New Customers Amid Operations Chaos

Clothing rental service Rent the Runway is temporarily halting taking on new customers or new orders while its tries to fix major operational problems that have caused it to delay or cancel orders, angering legions of its customers.

Chief executive Jennifer Hyman told customers in an email on Friday that the delays, which started on Sept. 13, stem from unexpected problems caused by “a significant transformation” it is conducting on its fulfillment operations. The goal is to speed up turnaround time so clothes can be rented again more quickly.

“So that we can focus entirely on you, our current customers, while we fix these issues, we will not be accepting new subscribers or new event rental orders to be delivered before Oct. 15,” she wrote.

Rent the Runway, valued at $1 billion after a $125 million funding round in March, also warned customers that there could still be one- or two-day delays on deliveries until then.

Earlier this week, Rent the Runway’s social media feeds were swamped with complaints from customers angry about delays and very long customer service wait times. The company has offered full refunds as well as compensation of $200 in cash to customers who never received their orders or whose orders were canceled.

The crisis management underscores the large risk to the business if customers don’t trust Rent the Runway to deliver items on item, something crucial given that many rentals are for major life events like a wedding or a gala.

Many people also rely on the service for more day-to-day wear. Hyman said at the Code Commerce conference in early September that 70% of revenue comes from its monthly subscription for such clothing.

“You rely on us for meaningful events in your life and to get dressed everyday,” Hyman wrote in her Friday email. “We realize we have let some of you down, and we need to fix it.”

Rent the Runway’s plans cost between $89 and $159 and the company has found a niche among women who don’t want to wear an item twice or who want to have more flexibility in their wardrobe.

The company has expanded its physical presence with its own service centers where customers can return items they are done with and pick up new ones. And the company has struck deals with WeWork and Nordstrom to allow customers to drop off items at their locations.

Hyman told Bloomberg this week that the warehouse upgrade in question is to support a new racking system for inventory that would reduce turnaround times.

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https://fortune.com/2019/09/27/rent-the-runway-stops-taking-new-customers-amid-operations-chaos/

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