FashionPass Sues Rent the Runway, Cites an ‘Anti-Competitive Scheme’
FashionPass, an Los Angeles-based fashion rental business, filed a lawsuit Tuesday against fashion rental service leader Rent the Runway, reports Footwear News. The suit alleges Rent the Runway "embarked upon a wrongful, anti-competitive scheme and conspiracy to eliminate competition from FashionPass, rather than fairly competing against FashionPass in the marketplace," according to an email sent to Total Retail from FashionPass’ PR agency. The lawsuit also alleges that Rent the Runway is "exerting its superior market power and financial capabilities to coerce FashionPass’ top suppliers to refuse to sell merchandise" to the startup. The lawsuit comes after months of lost business for the startup apparel rental retailer.
Total Retail's Take: Competition in the fashion rental space is heating up as more and more startups look to gain foothold in the fast-growing category. FashionPass, founded in 2016, has grown quickly, but it has a long way to go to challenge Rent the Runway, the dominant fashion rental company. Rent the Runway recently reached $1 billion in value after a recent funding round. Several other retail fashion startups such as Stich Fix, Armoire, Le Tote, and Gwynnie Bee are trying to break into the rental space by offering different variations of monthly subscription offerings; accessory pairings; personalized stylists; and plus-sized, children's, and men's apparel. As each company seeks out brands to fill their virtual closets, the pressure mounts to grab high-profile designer products, luxury apparel, and specialty offerings to win over consumers. FashionPass’ lawsuit against Rent the Runway highlights the fierce competition over product suppliers and merchandise as the rental sector grows exponentially.