What’s going on between Rent the Runway and WeWork?
The two unicorns forged a partnership in 2018, allowing users of the clothing rental company to drop off items at a number of WeWork locations across the country. But it was today revealed that three of these sites in New York City would stop serving Rent the Runway customers.
Beginning Jan. 10, WeWork Bryant Park, WeWork Times Square and WeWork Williamsburg will no longer offer drop-off boxes, which have become increasingly popular with Rent the Runway’s reported 11 million customers, especially city dwellers who often favor them over having to mail back their clothes.
Instead, Rent the Runway will be opening a new drop-off box at West Elm on Broadway between 61st and 62nd Streets and has plans to open more in other Midtown locations, although it did not state with whom. It already has a partnership with the homewares company as it offers West Elm rentals.
In an e-mail to its users, Rent the Runway blamed congestion issues in the lobbies of these particular WeWork offices as its services have become increasingly popular.
“Over the past year, our community using the service has significantly increased, resulting in congestion at some WeWork locations. As a result, we are closing three locations effective January 10, 2020,” it said.
However, the announcement will no doubt raise questions over whether the move has something to do with the issues WeWork has been facing over the past few months.
Its troubles came to light at the end of September when its parent, We Co., postponed plans for a highly anticipated initial public offering after investors poked financial holes in its official filings and questioned the firm’s leadership structure, leading to the ousting of its chief executive officer and cofounder Adam Neumann.
And in November, the office rental company laid off 2,400 staff, almost 20 percent of its total headcount, as new management battled to turn its fortunes around.
In prepared statements, though, the two companies insisted that the latest move was down to the congestion issues and that drop-off boxes in 16 other WeWork locations would remain open.
A WeWork spokeswoman said: “Due to high demand for this service resulting in congestion in some of our common spaces, we are closing drop-off boxes at three locations. We will continue to offer drop-off boxes in more than a dozen locations across the U.S. and work closely with Rent the Runway to provide a great experience to our members.”
A Rent the Runway spokesman added it will continue to “partner with WeWork and innovate our Drop-Off Box experience to meet our customers where they are and make the Rent the Runway experience as convenient as possible.” It is also expanding its drop-off box service to include corporate offices other than WeWork.
Until recently, the majority of Rent the Runway’s drop-off boxes were located in the lobbies of WeWork coworking spaces in six major cities across the U.S., including New York, Los Angeles and San Francisco, while there were a few at Nordstrom stores and Rent the Runway’s stand-alone stores. That has changed in the past few months, though, with Nordstrom taking over as having the most. At the latest count, that stood at 27.
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