Saks Off 5th expands in resale with Rent the Runway

The news

Saks Off 5th and Rent the Runway are partnering to offer pre-owned designer clothes. Under the tie-up, discount women’s retailer Saks Off 5th will offer items directly from Rent the Runway. The companies said hundreds of styles from more than 60 designer brands will be available for up to 85% off.

How does it work?

• Saks Off 5th is introducing a new section of its website for pre-owned items.
• Rent the Runway is offering a curated collection within this section, with Rent the Runway items denoted by a Rent the Runway badge.
• All of the items are deemed to be in “excellent condition” by Rent the Runway.

What it means for each business

The move brings together two companies that specialize in designer fashion, operating in distinct subcategories of the space: designer and resale. Let's break down where this fits into the recent journey of both businesses:

Rent the Runway extended its business into new areas as it built toward a comeback from a pandemic-prompted dip in demand for its rental business. This included making a bigger foray into resale, as it opened up the secondhand sales offering to shoppers who weren't already a member of its subscription business. A partnership with a widely-visited site can only help to increase sales in this channel, and expose more people to it as a distinct offering from Rent the Runway.

Along with being a shopping destination, the resale business also serves as an entry point to Rent the Runway, as no membership is required to shop the resale area. Plus, it’s another way for shoppers to browse the clothing it has available.

Making a portion of this selection available on Saks Off 5th creates yet another new venue through which Rent the Runway as a whole can be experienced. The partnership allows Rent the Runway to add channels as it further builds momentum amid the return to in-person activities and renewed demand for designer items. Driving toward subscriptions to the rental business is key for Rent the Runway, and Saks Off 5th adds a way to start that journey that reaches customers beyond its own site and advertising channels.

"This partnership with Saks Off 5th is an extension of Rent the Runway's existing resale offering, which broadens RTR's funnel of potential customers and offers consumers another way to experience its designer inventory," the companies wrote.

Saks Off 5th became a standalone ecommerce business in June 2021 after it was spun off by owner HBC and raised $200 million from Insight Partners. Coincidentally, this was the same month that Rent the Runway announced its expanded resale business. A rebrand followed in March, with a more vibrant look aimed at catching the attention of a "younger fashion-minded core customer." As it grows independently, Saks Off 5th can expand into emerging areas of ecommerce. Resale is one of those segments. It has been rising as shoppers seek more sustainable fashion amid rising imperative to slow the impacts of climate change, while Gen Z and millennials in particular are more comfortable shopping secondhand. According to the company, a recent survey of Saks Off 5th shoppers showed that 70% of respondents previously purchased pre-owned clothing, shoes or accessories. Meanwhile, 80% of the customers indicated that they want the opportunity to purchase pre-owned fashion directly from the retailer’s site.

Selling items from Rent the Runway offers the opportunity to introduce a recognizable name that is already known as a go-to source for designer fashion in ecommerce. It can also bring goods from a number of labels onto the platform through a single agreement. And most of all, Rent the Runway is already popular with the younger customers that Saks Off 5th wants to reach.

All in all, the partnership allows Saks Off 5th to reach Gen Z and millennial customers in two ways: It is entering a subcategory in resale that is popular with this age group, and partnering with a name in Rent the Runway that is well-known for fashion with that age group.

"At Saks Off 5th, we're focused on providing access to designer fashion at an incredible value and we continue to look for innovative ways to expand our offering and deliver on that promise for our customers," said Saks Off 5th CEO Paige Thomas, in a statement. "Through this unique relationship with Rent the Runway, we're introducing new brands, providing exceptional deals and offering pre-owned apparel from a trusted partner that resonates with our customers."

The environmental imperative

Reducing waste in the fashion industry is a growing concern, and one way to do so is to use a garment that’s already in existence, rather than make a new one. A ThredUP report projects the secondhand market will double by 2026 to $82 billion.

Rent the Runway’s business has included a variety of innovations, including standing up a science team that uses data for cleaning programs and other strategies to increase garment longevity. That process is now making the items available for resale.

"Whether renting or shopping resale, the secondhand economy is a critical part of creating a more sustainable future for our industry,” said Rent the Runway CEO Jennifer Hyman. “Saks Off 5th is known for offering incredible designer goods at great prices, which is a fantastic launch pad to educate more consumers, and help to extend the life of these garments."

The bottom line

The partnership has benefits for both businesses as they seek to make inroads with resale. Saks Off 5th grows smartly in the category, while Rent the Runway opens up a channel for reaching new customers that feels like it could be offered to other retailers, if successful. It shows how established names can partner to grow in emerging segments together.