Rent the Runway claims that its business is back to normal after a cascade of late and canceled orders from disgruntled customers.
Jennifer Hyman, chief executive of Rent the Runway, said the operation is back to normal on Tuesday morning, "a few days ahead of schedule". The company had previously announced that it would aim for October 15.
The fashion retailer tried to limit the damage after customers indicated last month that outfits ordered for special occasions had not arrived on time or had been canceled without warning. Rent the Runway, where the implementation of new software disrupted the sorting system, promised to reimburse some customers and give $ 200 in cash to others whose orders were never shipped.
Services were halted for eleven days, and during downtime new subscriptions and individual orders were frozen, resulting in a short-term decline in revenue. New customers were temporarily excluded from the registration and placed on a waiting list. They are now being processed. In the meantime, their cash payments were sent to existing customers last week as the inventory issues were resolved.
The break began in mid-September after Rent the Runway's new clothing racking system at the company's New Jersey distribution center went into effect. In total, 14% of Rent the Runway subscribers and 6% of customers using the service for one-off events were affected.
The company's top supply chain manager stepped down as angry customers poured into the service's social media pages to express their dismay that they were stuck without their planned wedding and galas clothes.
Rent the Runway was founded by Hyman and Jennifer Fleiss, who are now executives at Walmart Inc. The company has valued more than $ 1 billion and has raised more than $ 500 million in venture capital and debt from investors such as Franklin Templeton, Bain Capital Ventures and Temasek Holdings.
It has quickly become a subscription business, with most customers now paying a monthly fee of $ 159 for the rental of items, which may include Kate Spade dresses and Oscar de la Renta earrings. The service has also started to rent children's clothing and home decor.