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1) Rent the Runway expanded its partnership with Nordstrom, a positive move for both parties and a risk-adjusted strategy for the rental company to stay ahead of the pack.

WHAT HAPPENED: Rent the Runway expanded the number of Nordstrom locations that feature its drop-boxes from five to 22 across the U.S. Nordstrom will also incorporate its inventory with Rent the Runway’s and the two companies will collaborate to create clothing together, available at both Nordstrom and Rent the Runway. WHY IT MATTERS
  • The strengthened partnership helps both companies further their reach and solve their respective problems. In addition to customer acquisition, the partnership lowers shipping costs for Rent the Runway, enabling it to return items more frequently and in bulk. The result is more inventory liquidity, which means customers can access products faster, which increases the value of its Unlimited service. Rent the Runway previously relied on WeWork to serve this role (it had drop-boxes in 15 WeWork locations), but with uncertainty around WeWork’s future, Nordstrom is a more reliable and relevant partner.
  • Rent the Runway’s partnership with Nordstrom is less risky than Le Tote’s acquisition of Lord & Taylor. Rent the Runway receives all of the benefits of partnering with a legacy department store—a physical presence, inventory absorption, data sharing, and customer acquisition—but it is not directly responsible for the health of Nordstrom’s business. Le Tote, however, which bought Lord & Taylor, is now financially dependent on turning around the struggling legacy retailer. For a company with enough logistics issues on its hands, this partnership allows Rent the Runway to focus on building its own infrastructure while using Nordstrom to help improve its marketing and operations.

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