![]() Rent The Runway’s value will come down to earth and they need to prove their ability to make a consistent profit in order to be successful for their investors. Using data and logistics in a business does not make a company FedEx FDX. Non-software companies’ value is based on whether its products meet consumers’ needs and what it costs to get consumers to become customers. ![]() The world is coming to realize that consumer businesses selling (or renting) products can never have the kind of values that Apple AAPL or Google have. Most important, it can’t survive, the business has to be profitable and ultimately it’s valuation has to be undergirded by profits and not a comparison to software companies. My response is that if innovation, disruption and leadership is accompanied by overvaluation and continued losses, then it may be disruptive but it is not leadership or innovation. On the other hand, Rent the Runway is the opposite, disrupting how women shop, showing high growth, and becoming the leader in their space. They have said to me, Hertz has been struggling under mountains of debt for years, has not been able to innovate, and has lost market share to competition, such as Uber UBER. ![]() Its value is created in the ability to do fashion right, just as Hertz has to choose the right cars and use data and logistics to get the cars to the right places for customers.Īdvocates for Rent The Runway would dispute the comparison with Hertz. It turns out that Rent The Runway is in a business that’s a lot closer to Hertz’s than to Google GOOGL’s or Microsoft MSFT’s. Companies that rent or lease products, like Hertz, are valued based on whether their fleet satisfies the needs of their customers in a way that makes money. ![]() Companies that own dresses are in the business of satisfying the fashion needs of their customers and their economics are more akin to a great dress store than anything else. But (as I wrote in a previous article about their valuation), data and logistics companies don’t own dresses. No doubt they use data to manage the shipping of their products efficiently, to select fashion-right clothes to put into their rental fleet, to manage revenue sharing with their vendors and to anticipate their customers’ needs. Please appreciate that there may be other options available to you than the products, providers or services covered by our service.Rent The Runway describes itself as a data and logistics company. compares a wide range of products, providers and services but we don't provide information on all available products, providers or services. Please don't interpret the order in which products appear on our Site as any endorsement or recommendation from us. While compensation arrangements may affect the order, position or placement of product information, it doesn't influence our assessment of those products. We may also receive compensation if you click on certain links posted on our site. We may receive compensation from our partners for placement of their products or services. While we are independent, the offers that appear on this site are from companies from which receives compensation. All international money transfer servicesį is an independent comparison platform and information service that aims to provide you with the tools you need to make better decisions.
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