Rent the Runway Inc.’s senior managers worked to dispatch smaller competitors in the fashion rental market by intentionally scheming to commandeer their suppliers, FashionPass Inc. claimed in its amended antitrust complaint Tuesday.
To do this, the leading clothing rental brand’s senior managers had its buyers ask fashion brands whether they sold their clothes to its competitors like FashionPass, and had their sales representatives ask fashion brands to supply exclusively to RTR, according to the amended complaint, which escalated the two companies’ ongoing battle in California federal court.
RTR even had a senior employee sign up for FashionPass’ service just to spy on what its popular brands were, FashionPass claimed.
“By mid-2018, RTR realized the threat that new fashion rental companies, particularly FashionPass, posed to its dominance,” FashionPass said in the amended complaint.
“Rather than compete with those companies in legitimate ways, RTR’s senior management initiated a campaign of dirty tricks, and ultimately illegal predatory conduct, to bring down its competitors, including FashionPass,” it wrote.
A representative for Rent the Runway did not immediately comment on Thursday.
FashionPass first sued RTR in March in state court in Los Angeles County, alleging that the company’s actions to steer away its suppliers had cost it some $3 million in damages. The company still estimates its damages to be in that ballpark, but it fleshed out more detailed complaints about RTR’s alleged monopolistic practices, based on documents it said it obtained over the course of the suit.
FashionPass’ amended complaint refers to “previously secret e-mails” between RTR and the fashion brands, which FashionPass claims show that RTR pushed for and enforced exclusivity agreements.
The case has taken some turns since the suit moved to federal court in April.
Rent the Runway had hit back against FashionPass, arguing in May that any difficulty FashionPass may be experiencing in the apparel rental market is simply because it is a newer entrant and smaller in scope.
Rent the Runway launched in 2009 as a service renting out women’s designer clothing and accessories, and does business through its web site as well as a handful of physical stores. FashionPass launched in 2016, targeting its clothing subscription service to a younger clientele, and conducting its business just online.
In June, U.S. District Judge George Wu sided with RTR to find that FashionPass had alleged only that RTR’s alleged conduct had hurt its business, but had not described how it may have harmed competition overall in the market. But he allowed FashionPass to amend its complaint. Earlier this month, FashionPass brought in more legal firepower by hiring big law firm Sidley Austin LLP to represent it in the suit.
In its latest filing, FashionPass refined its antitrust argument to claim that RTR uses its market power to strong-arm certain popular fashion brands into agreeing to its exclusive purchase agreements. Such deals serve no business purpose other than to sideline competing fashion rental companies by blocking them from obtaining clothes from those brands.
“One of the most important ways to keep subscribers is to offer access to desired brands, styles, and the latest trends — all of which RTR’s conduct targets and restricts,” FashionPass wrote in its amended complaint.
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