Saks Off 5th Partners With Rent the Runway
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Saks Off 5th is getting deeper into the second-hand market through a partnership with Rent the Runway, WWD has learned.
The partnership enables Saks Off 5th to introduce brands it didn’t previously sell, expand selections from those already carried, and tap a rapidly growing segment of customers seeking more value and to support the circular economy.
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Pre-owned merchandise from more than 60 brands bought from Rent the Runway is being offered on the SaksOff5th.com website. Some of the second-hand items are discounted by as much as 85 percent off the original price, though there’s a range in the discounting.
Brands being carried for the first time on SaksOff5th.com thanks to the partnership include BA&SH, Thakoon Collective, Marissa Webb, Prabal Gurung and Adam Lippes Collective, while the partnership has also brought to Off 5th expanded offerings from Equipment, Derek Lam 10 Crosby, Tanya Taylor, Tibi and Ganni, among other brands.
“As important as getting new access to designer brands is the fact that we now have additional access to some of the most favored brands customers have already been searching for and selecting on SaksOff5th.com,” Paige Thomas, president and chief executive officer of Saks Off 5th, told WWD. “This gives us more size integrity and depth, which will be beneficial particularly from a pre-owned perspective. Our customers are very engaged in the resale market. We’re focused on providing access to designer fashion at an incredible value as we continue to look for innovative ways to expand our offering.”
For Rent the Runway, the Off 5th tie-up “reinforces our mission to introduce an even wider audience to the immense value — both environmental and financial — of preloved fashion,” said Jennifer Hyman, CEO and cofounder. “Whether renting or shopping resale, the second-hand economy is a critical part of creating a more sustainable future for our industry.”
Hyman said the deal with Off 5th reflects “our holistic strategy we launched a few years ago to broaden our focus from rental into also resale and subscription.”
Beginning in March 2016, Rent the Runway subscribers could also purchase clothes from the retailer, but as of June 2021, it became possible to purchase from Rent the Runway’s selection of used clothes without being a subscriber. “Resale is a great funnel into Rent the Runway,” Hyman said.
Off 5th entered the pre-owned market in 2020 with LXR & Co., which provides pre-owned vintage handbags and leather accessories from brands like Prada, Celine, Gucci and Louis Vuitton.
“We have another partner launching in early third quarter,” even further expanding the company’s pre-owned strategy, Thomas said, declining to reveal details. “We think we have an opportunity to really expand the resale category in total, from vintage to resale to rental.” However, with Rent the Runway inventory, Off 5th is not renting any of the products. Off 5th has been purchasing product from Rent the Runway’s inventory, to resell it.
“In this partnership we will take ownership of the goods,” Thomas explained. “Rent the Runway has a phenomenal reputation. All items have been authenticated and are in excellent condition. Our team has taken ownership of the goods, which are in our warehouse in Pottsville, Pennsylvania, and available on our site.”
SaksOff5th.com has created a “pre-owned” section highlighting Rent the Runway’s items, which are being labeled with a specific badge. The merchandise will be “predominantly in season” and only sold on SaksOff5th.com, and not at the Saks Off 5th stores, Thomas said. Later a spokeswoman said, “At this time, we’re focused on launching this initiative on SaksOff5th.com. However, we continue to explore opportunities to grow our pre-owned presence in-store and online.”
Thomas cited statistics from the Boston Consulting Group that the resale market is growing two to three times faster than the retail sector, and that by 2025 it will be a $50 billion business globally.
Asked if sales of second-hand merchandise would cannibalize sales of new merchandise, Thomas replied, “I don’t believe so. Our customers look to us for both.” A Saks Off 5th survey emailed to the off-pricer’s adviser group, which includes more than 5,000 engaged customers, indicated that more than 70 percent of the respondents previously purchased pre-owned clothing, shoes or accessories. Furthermore, 80 percent of those customers indicated that they want the opportunity to purchase pre-owned fashion directly from Off 5th.
“Now it’s very normal to buy second-hand clothing,” said Hyman. “Businesses like Rent the Runway have made it both aspirational and cool to consider second-hand clothing. We have invested so much into our operations and cleaning and care.” She said the Rent the Runway website “feels like a traditional e-commerce company,” citing the depth and quality of its offerings “as opposed to others that appear sourced from customers’ closets with one-offs.”
ThredUp also buys merchandise from Rent the Runway, though Hyman said, “It’s more of a liquidation partnership with ThredUp. That’s a major distinction” from the partnership with Off 5th, where the merchandise supplied is “like new.” The merchandise that winds up at ThredUp “is not in rentable condition,” though there are still customers for it, said Hyman.
For the launch with Off 5th, “We insured a very broad and diverse assortment, with over 60 brands,” Hyman added. Rent the Runway offers a range including eveningwear, workwear, denim, maternity, outerwear, blouses, knitwear, loungewear, jewelry, handbags, activewear, skiwear, home goods and kidswear.
“As we think about an impending recession, consumers are more focused on smart ways to shop and getting value. Part of the impetus of launching Rent the Runway in the last recession in 2009 was the observation that women were still buying lots of clothes. They wanted variety and wanted to get that in a value-oriented way. They were buying upward of 60 articles a year and traded down to more valued-oriented retailers.
“This partnership makes a lot of sense right now,” said Hyman. “The timing is very spot-on in terms of what’s going on in the macro environment.”
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