Not for Free

2

Pricing Innovation

The prom king has always been able to rent a tuxedo for “the big event.” But what about the queen? Her choices are mostly limited to wearing something she already owns, borrowing from a friend, or buying an expensive new dress—imperfect options for the fashion-forward on a budget. No young woman wants to wear “this old thing” for a special event. A borrowed dress may not offer the best style-match or fit, and new dresses, as all parents of daughters know, can be shockingly expensive. And don’t forget that she still needs accessories.

Fashion start-up Rent the Runway has hit on a solution: fashion rental. Started by two newly minted MBAs who obviously learned something about business models, the new venture buys inventory ...