Neiman Marcus to open Rent the Runway shop-in-shop in San Francisco

By

Obi Anyanwu

Published
Nov 16, 2016

Neiman Marcus has a plan to reduce its losses and exit its sales slump and it involves Rent the Runway. The luxury retailer recently partnered with the fashion rental service to open a Rent the Runway shop-in-shop at its Union Square location in San Francisco, which is slated to open on November 18 just in time for the holidays.

 
The two companies seem like an unlikely duo, but they share many things in common like a product mix and customer. Rent the Runway offers designers and brands like Diane von Furstenberg, Proenza Schouler and Oscar de la Renta that are available at Neiman Marcus locations. Rent the Runway Co-Founder and Chief Executive Jennifer Hyman told the Washington Post that the company considers fast fashion to be its true competitor and not “traditional designer fashion.” She also told Forbes that the Rent the Runway customer is spending more money on “investment pieces” than on fast fashion.

While Rent the Runway gains more exposure and a new customer base through Neiman Marcus, the luxury retailer gets access to the rental service's customer. Neiman Marcus Chief Executive Karen Katz told the Washington Post that the company aims to get better acquainted with the “millennial young woman” that Rent the Runway attracts.  

Hyman added, “What people rent is inherently different from what they buy. They’re buying things that make sense for multiple uses throughout their lifetime.” The new shop-in-shop can enhance the overall Neiman Marcus shopping experience by giving customers more freedom of choice. Instead of skipping a purchase or buying and returning a garment, customers can rent a particular piece and both companies can reap the rewards.
 
Hyman co-founded Rent the Runway with fellow Harvard Business School alum Jennifer Fleiss in 2009 to give women access to designer fashion and accessories through rentals. The company has received $126 million in capital in its 7 years in business, it operates brick-and-mortar locations in New York City, Chicago, Washington DC, San Francisco, Las Vegas and Topanga, and it currently has over 6 million members. 
 
Rent the Runway will be located at the Neiman Marcus San Francisco store as the "RTR Bar" where women can set up appointments, and receive courier service and styling advice.
 
Neiman Marcus was in a financial slump for most of fiscal 2016 posting a decrease in total revenues and comparable revenues for the year. The retailer’s net loss widened to $407.2 million from $32.9 million in the fourth quarter, and it reported a full year net loss of $406.1 million compared to net earnings of $14.9 million in 2015. The retailer also recently losses its CFO Donald T. Grimes who stepped down from his position to join Sally Beauty.
 
The retailer plans to open more Rent the Runway locations at its stores in 2017.