Story Details - Alumni - Harvard Business School

17 Nov 2016

Rent the Runway Sets Up Shop at Neiman Marcus

Re: Jenn Hyman (MBA 2009); Jenny Carter Fleiss (MBA 2009); Jim Gold (MBA 1991)

Topics: Lifestyle-Fashion and Beauty Relationships-Partners and Partnerships Business Ventures-Joint Ventures Marketing-Marketing Strategy Markets-Consumer Behavior Strategy-Diversification Demographics-Age

(WSJ photo illustration)

The online fashion innovator Rent the Runway—brainchild of Jennifer Hyman and Jennifer Fleiss (both MBA 2009)—is continuing to go brick-and-mortar.

The Wall Street Journal details the new partnership between the seven-year-old startup and 110-year-old department store, which will see new Rent the Runway shops open inside of existing Neiman Marcus locations. (Rent the Runway opened its first physical store in New York City in 2014, and now has a total of seven locations.)

The Journal offers some insight into the strategy behind the move:

The average Rent the Runway customer is 29 years old—more than two decades younger than the average Neiman Marcus shopper, who is 51, the companies say. Neiman Marcus executives are also looking forward to collecting shopping data to study how these young dress renters spend in other areas of the stores.

Neiman Marcus also hopes that once it has enticed some of Rent the Runway’s six million members inside its doors, it can sell them cosmetics, underpinnings, jewelry and maybe some heels to match.

The first Rent the Runway/Nieman Marcus store opens this Friday in San Francisco, but the partnership, the Journal notes, dates back to 2008, when Hyman first met with Nieman Marcus president Jim Gold (MBA 1991).

Ms. Hyman, then at Harvard, convinced Mr. Gold to meet her to discuss a potential job, and mentioned she’d had an idea for an apparel-rental start-up. “I said, look, you’re not going to find a job right now, why don’t you just go for it?” Mr. Gold recalls advising her. “Three months later she’d raised, like, $3 million.”

Ms. Hyman invited him to join her board, but he worried about a conflict of interest. “I declined and it was financially most unfortunate,” he says wryly. They stayed in touch. He introduced her to Ms. Katz, and eventually hatched the plan for this partnership.