Saks Off 5th Speaking to Gen Z By Selling Used Rent the Runway Fashion – Sourcing Journal
The curated selection spanning hundreds of styles from more than 60 designer brands now available on saksoff5th.com extends Rent the Runway’s existing resale offering and broadens the platform’s funnel of potential customers while offering another way to experience its merchandise.
SaksOff5th.com nows feature a dedicated “pre-owned” section that will highlight Rent the Runway’s inventory assortment to steer shoppers toward these items. Customers can browse and buy items for a variety of occasions at up to 85 percent off the original manufacturing price.
Brands being carried for the first time on SaksOff5th.com include Ba&sh, Thakoon Collective, Marissa Webb, Prabal Gurung and Adam Lippes Collective, while the partnership has also brought expanded offerings from Equipment, Derek Lam 10 Crosby, Tanya Taylor, Tibi and Ganni, among other brands.
The partnership comes in the wake of a recent study from Saks Off 5th, in which more than 70 percent of consumers revealed they previously purchased pre-owned clothing, shoes or accessories. Furthermore, 80 percent of the 5,000 customers studied indicated that they want the opportunity to purchase pre-owned fashion directly from Saks Off 5th.
“At Saks Off 5th, we’re focused on providing access to designer fashion at an incredible value and we continue to look for innovative ways to expand our offering and deliver on that promise for our customers,” said Paige Thomas, president and CEO, Saks Off 5th, in a statement. “Through this unique relationship with Rent the Runway, we’re introducing new brands, providing exceptional deals and offering pre-owned apparel from a trusted partner that resonates with our customers.”
A representative from Rent the Runway told Sourcing Journal that inventory will remain online only at this point. Saks Off 5th described the partnership as a way to expand its own pre-owned assortment.
“At this time, we’re focused on launching this initiative on SaksOff5th.com,” a representative for Saks Off 5th told Sourcing Journal. “However, we continue to explore opportunities to grow our pre-owned presence in-store and online.”
Saks Off 5th’s online business is technically a separate company from the Saks Off 5th brick-and-mortar operation. In June 2021, private equity firm Insight Partners invested $200 million into the luxury off-price e-commerce seller as it split off from its physical counterpart, valuing it at roughly $1 billion. Saks Off 5th parent Hudson’s Bay Company (HBC) split both the Saks Fifth Avenue and Hudson’s Bay retail operations in the same way so that the physical and digital businesses of each brand became standalone companies.
For both Saks Off 5th and Rent the Runway, the sales potential is tantalizing. The 2022 Resale Report from ThredUp and GlobalData indicates that the global secondhand goods market is expected to grow 24 percent in 2022 after 32 percent growth in the U.S last year. The report anticipates that growth in this field could reach 127 percent by 2026, or three times faster than the overall clothing market.
“This partnership with Saks Off 5th bolsters and reinforces Rent the Runway’s mission to introduce an even wider audience to the immense value–both environmental and financial–of pre-loved fashion,” said Jennifer Hyman, CEO and co-founder, Rent the Runway, in a statement. “Whether renting or shopping resale, the secondhand economy is a critical part of creating a more sustainable future for our industry. Saks Off 5th is known for offering incredible designer goods at great prices, which is a fantastic launch pad to educate more consumers, and help to extend the life of these garments.”
Rent the Runway is still trying to drive toward profitability, coming off a first quarter in which it had $42.5 million in net losses after a 2021 that incurred $211.8 million in total losses.
As such, RTR has shifted its business model upon going public, moving away from a capital-heavy wholesale model of buying and holding stock, toward efficient asset-light strategies such as acquiring inventory from brands at no or low upfront cost and sharing a slice of the revenue. The luxury rental service has been looking to mitigate product depreciation, which was a heavy cost for the business as it was forced to clean up stains and fix up wear-and-tear of a garment used over time.
So far, that bet, along with a focus on its “Exclusive Designs” collections, appears to be working. The company has recouped all the subscribers it lost during the Covid-19 pandemic, when it closed its five physical stores and scrapped its unlimited membership. Its active subscriber base rose 82 percent to nearly 135,000 by quarter’s end, a 17 percent increase from the previous quarter and its highest end-of-quarter count ever.
As part of the new partnership, Saks Off 5th will buy authenticated stock from Rent the Runway, sell it and fulfill orders from its Pottsville, Penn. warehouse, helping the latter to clear old inventory. All items have been deemed “excellent condition” by Rent the Runway and will be identified on SaksOff5th.com by a Rent the Runway-specific badge.
This isn’t the first partnership of this nature for Rent the Runway, which sold used garments through select Nordstrom Rack stores in a short-lived pilot in early 2020 and also had a similar deal with ThredUp’s online platform. Saks Off 5th entered the pre-owned market in 2020 as well with vintage luxury seller LXR, which offers pre-owned vintage handbags and leather accessories from brands like Prada, Celine, Gucci and Louis Vuitton.