Rent the Runway Appoints First CMO Since 2020 as It Vies for Profitability

Fashion rental platform Rent the Runway has a new chief marketer for the first time in four years, the company announced Wednesday. Natalie McGrath, most recently vice president of marketing for buy now, pay later platform Afterpay, will oversee brand and growth marketing, creative services, public relations and customer service as chief marketing officer. The hire comes at a turbulent yet critical moment for Rent the Runway, as it aims for profitability by the end of 2024. The company underwent a restructuring in January, which included layoffs amounting to 10% of its staff. The brand's longtime president and chief operating officer, Anushka Salinas, left at the end of the month. Sustainable Apparel Coalition Expands for the Greener Good "The goal of our restructuring was to realign and refocus our company around growth," co-founder, CEO and president Jennifer Hyman said. "Our job now is to reignite emotional connections with our customers, which is how we’ve been successful in growing our business in the past." The fight for profitability Rent the Runway was founded in 2009 to create "the world's largest shared designer closet," purporting that its pioneering rental model was a more sustainable and cost-effective way for women to get dressed. But despite raising over $500 million in debt and equity in its first decade, the company has yet to turn a profit. It went public in 2021 at $21 per share, but it hasn't traded above $5 since August 2022 and was valued at $0.41 per share at the time of writing. The company laid off nearly one-quarter of its staff in 2022 as it worked to recover from the Covid-19 pandemic disruption to subscriptions (60% of subscribers paused or canceled amid lockdown), announcing a planned restructure to focus on profitability as the ZIRP era (zero interest rate policy) came to a close. After restructuring its debt in December and the whole company in January, the company said it is on track to break even by the end of this year. Rent the Runway says there's room for rental to grow. Over 11 million women in the U.S. have used clothing rental services in the past few years, the company said, pointing to a 2023 report from Research and Markets, and the category is growing at 11% per year. Often grouped with online resale platforms like thredUP and The RealReal, which were founded at around the same time, Rent the Runway is part of a cohort of startups that have aimed to disrupt the steep environmental costs associated with the fashion industry. So far, though, fast fashion has outpaced these efforts, and profitability challenges continue to plague resale and rental models due to hefty logistical costs. Leaning on IRL connections McGrath, who will report directly to Hyman, starts March 4. Before her role at Afterpay, she held senior marketing positions at fast fashion company Boohoo, luxury brands Coach and Alexander Wang, and luxury retailer Net-a-Porter. Rent the Runway's marketing strategy will center on experiential marketing, lifecycle marketing and customer experience initiatives as the company aims to usher in the "next phase of growth," as Hyman described it. Planning is already underway for upcoming in-person events in New York, she said. "We believe we’ll win by accelerating and deepening the emotional connections with our current customers—and reaching new ones via services, events and programs that get RTR back out into the world, interacting IRL (in real life) with our customers and through omnichannel marketing experiences," McGrath said. "The world has shifted dramatically over the past few years, and we are extremely well-positioned to put the brand back into growth mode and build culturally relevant storytelling and campaigns that infuse RTR in our customers' everyday lives."