Shady business
Rent the Runway, the startup that lets thrifty fashionistas rent designer dresses for special occasions, seems sketchier by the minute.
Recently we reported that the site had begun selling its own in-house designs under the names Slate & Willow, for dresses, and Ella Carter, for accessories and jewelry. However, the site didn’t clarify that the brands were Rent the Runway’s own designs, and it also listed retail values for the items, even though the items were never sold in stores.
Customer backlash
Customers responded with dismay to these deceptive tactics, arguing that the site misleads customers into thinking that the dresses are more valuable than they really are. Some speculated that Rent the Runway was falsifying retail prices because the startup impresses investors by using the total retail value of their products as a measure of success. Others noted that, in the past, discount retailers have gotten into legal trouble for using misleading labels with fake retail values.
Representatives from Rent the Runway made some weak excuses, saying that they needed more time to update the site with accurate information, and that they would “love for our customers to know that these styles are exclusive to RTR.”
Buying wholesale dresses, turning them for profit
Well, here’s the latest – it turns out that Rent the Runway’s supposedly “exclusive” designs, are, in fact, available from stores – but not for the retail prices listed on the site.
A dissatisfied RTR customer brought the situation to the attention of BuzzFeed’s Sapna Maheshwari, who blew the whistle on RTR’s made-up retail prices. A customer who had rented a dress from RTR later saw the same dress sold on Nordstrom.com at a significantly lower price than the one listed on RTR. The dress was identical to the one she had rented, but was sold under the label “Maia.”
Slate and Willow brand, suggested retail $595
Slate and Willow brand, reduced suggested retail $345
Maia brand, Nordstrom actual price $129
Maia brand, Von Maur actual price $118
The customer says she felt like she was “scammed” and suspects that “Slate and Willow is a company made up by Rent the Runway to mask the fact that [they’re] buying the dresses wholesale for very cheap.” Maheshwari began an investigation, discovering that several of Slate and Willow’s designs are sold at other stores and on other sites, often for hundreds of dollars less than the retail values listed on RTR.
Water getting hotter
The customer received a refund, and after Maheshwari contacted RTR, the site lowered several of the listed retail prices on its site. Nonetheless, the startup, which has yet to turn a profit, is not doing itself any favors by starting out with a reputation for being dishonest.
In the words of the customer service rep who worked with the disgruntled renter, “our company would be in serious trouble if were being disloyal.”
#RenttheRunway
