Rent the Runway is permanently closing its five physical stores—in New York City, Chicago, Los Angeles, San Francisco, and Washington, D.C.—as the company that first introduced the idea of the “closet in the cloud” rethinks traditional retail.
President and chief operating officer Anushka Salinas told Business Insider that the New York City flagship store will be permanently transformed into a return site for rented garments. Salinas told the outlet that the company will now shift its focus back to online-only, while also working towards increasing its drop-off locations around the country. Salinas added that shuttering its brick and mortar stores was something the company had “long considered” but the decision was accelerated by the pandemic.
The startup, valued at $1 billion, had furloughed 35% of its employees and laid off 10% of its overall workforce as a result of the spread of COVID. Back in April, CEO and founder Jenn Hyman said that the company was still confident in its relevancy, despite working from home looking like a near-permanent solution for many professionals.
“We built Rent the Runway so our customers could ‘show up’ feeling powerful and confident every single day, whether they’re at work or in a Zoom meeting,” she said. “No amount of scenario planning could have prepared any business for the fallout of coronavirus, but our path forward remains unchanged, and even in a new normal, our mission is more relevant than ever. We will continue to be here for our customers so they can access the closet in the cloud with total flexibility.”
The Rent the Runway news comes days after another New York City-based billion-dollar startup lamented it was closing up shop. Emily Weiss’ millennial-focused beauty brand Glossier is also to permanently close its physical locations, each a notably popular tourist hotspot, in New York City, Los Angeles, and London.
The beauty brand shared a blog post stating, “Since we closed our stores in March, we’ve strived to make the ‘right next decision’ with a people-first lens, given all the uncertainty surrounding the pandemic. In recent months, it’s become clear that we will be living with the health and safety risks of COVID-19 for the remainder of 2020 and likely beyond. In light of this time horizon, we’ve made the difficult decision that we will not reopen our three stores this year, and possibly for the duration of the pandemic.”
Glossier’s retail staff—who had been furloughed since June—will be given three month’s severance, healthcare coverage through the end of October, and additional wellness and mental health services.