Rent the Runway could be headed to court.
The wildly popular fashion rental service — which recently hit a reported $1 billion valuation as its unique business model continues to find favor among millennials — is being sued by rival FashionPass for alleged unfair competition.
In court documents filed today, FashionPass, a smaller, newer such company, claims Rent the Runway — after observing its competitor’s “considerable growth and success” — “embarked upon a wrongful, anticompetitive scheme and conspiracy to eliminate competition from FashionPass, rather than fairly competing against [the new company].” (FashionPass launched in 2016, while RTR hit the market in 2009.)
“Specifically, Rent the Runway is exerting its superior market power and financial capabilities to coerce FashionPass’ top suppliers to refuse to sell merchandise to FashionPass and is thereby attempting to eliminate competition from FashionPass,” the suit alleges.
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In the complaint, FashionPass lists about 20 fashion-makers — including ASTR the Label, Amanda Uprichard and Sanctuary Clothing — as among those it claims RTR coerced or threatened into refusing to sell to FashionPass.
Los Angeles-based FashionPass claims to have been working with some brands as far back as 2016 but learned late in 2018 that all 20 of the labels listed in its suit would no longer work with the company because each “had granted RTR an exclusive right to purchase merchandise in the fashion rental business.”
The suit further states that the group of brands RTR allegedly coerced away from selling to FashionPass includes three of FashionPass’s top five revenue-generating brands.
FashionPass is seeking damages in excess of $6 million.
RTR did not immediately respond to FN’s request for comment.
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