• by Sarah Mahoney , Staff Writer @mahoney_sarah, April 15, 2024

New ads focus on successful business owners, like Amanda McClements, who owns Washington D.C.'s Salt & Sundry

While tech-driven fashion platforms are struggling everywhere, it’s too soon to count Rent the Runway out. In fourth-quarter earnings last week, the company offered evidence that despite losses and setbacks, there are early signs of brand strength -- including its highest customer satisfaction scores in several years.

In a conference call to investors, the company also offered a peek into new ways it hopes to augment the basic fashion-rental operating model, including incorporating more AI, expanding the resale business and “laying the foundations” for a move into advertising.

That upbeat assessment from Jennifer Hyman, co-founder and chief executive officer, was enough to send the company’s stock price up by 260%, the highest level this year.

The New York-based company says revenue increased in the fourth quarter 1% to $75.8 million, compared to $75.4 million in the fourth quarter of fiscal 2022. Total active subscribers also grew by 1%, to 173,247.

The company’s net loss shrank to $24.8 million, compared to $26.2 million in the year-ago period.

While those gains might seem like small progress, they are better than the company initially forecast. And when set against the calamitous backdrop of other luxury resale tech companies, including the implosion of platforms like Matches, Farfetch and Yoox Net-A-Porter, they seem especially positive.

Hyman also promised to make marketing a more significant part of the comeback initiative. Under Natalie McGrath, who was tapped as the new chief marketing officer last month, efforts are already underway. “We have started the year reigniting brand love by celebrating women in our core customer demographic,” Hyman told investors. “We launched LinkedIn and 'Real Runway' campaigns, which share influential women’s stories.”

McGrath expects marketing will take several quarters to ramp up. “Our customers will see and hear from us much more as we activate in real life via partnerships, PR influencers, celebrities and content.”

Female empowerment will remain at the center of the brand’s stories. The LinkedIn effort, which called for nominations of women’s achievements in the workplace, garnered about 630 million total impressions.

The company is also looking to empower advertisers.

Rent the Runway, which built its brand as “the world’s first and largest shared designer closet platform,” is also adding one-to-one concierge services. The idea is to make exploration and discovery easier for customers and create a more aspirational product experience.

It reports “significant” growth in “Try Before You Buy,” its resale business.

And in an era when so many retailers and e-tailers are eagerly rolling out advertising networks, Rent the Runway plans to be in the mix. “Initially, advertising is largely comprised of a sampling business that makes the most of the millions of shipments we send to customers each year,” Hyman says. “However, there is more we think we can do here. It is too early to go into more detail, but we see considerable cash generation potential.”