The Business of Fashion Two entrepreneurs talk dollars and sense
Who Are You Renting? Rent the Runway delivers fashion for less Sometimes an idea makes so much sense it’s hard
in the cost; insurance is $5 extra. Afterward, renters
to believe no one thought of it before. That’s the
slip everything in a pre-paid envelope and drop it in
case with Rent the Runway, a membership-based
the mail.
website that rents high-end fashions such as Calvin
Initially, Hyman said, high-end designers
Klein and Badgley Mischka. In April, founder
didn’t like the idea of people renting their clothes,
Jennifer Hyman, a twentysomething Harvard
but they also told her that most of their customers
MBA, addressed FIT students at a Business and
were in their 50s and 60s. Hyman says the site
Technology Dean’s Forum. Hyman raised millions
encourages young people to value “aspirational”
from venture capitalists for the business, which
(read: luxury) labels. “Over 50 percent of the time,
launched in 2009 and now employs 200 people.
customers end up buying something from the brand,”
Site members rent dresses and accessories for
she said. Many women buy outfits from department
four to eight days, choosing from more than 170
stores, wear them to a special event, then return
designer brands, at 10 to 15 percent of the retail
them for a refund the next day. “We’ve simply
price. They are sent two sizes of the chosen style to
legalized this practice,” Hyman said.
allow for variances in fit. For an extra $25, they can receive an additional outfit. Dry cleaning is included
He Guarantees It The co-founder of Men’s Wearhouse shares four decades of business wisdom “Doing the right thing isn’t free, but it’s not as
child care at its corporate offices. Other perks
expensive as you might think,” said George Zimmer,
include offsite trainings and lavish holiday parties.
co-founder and former executive chairman of
Managers, often promoted from within, are reward-
Men’s Wearhouse, in a talk at FIT in May called
ed by their ability to create success in others. Even
“Conscious Capitalism: Building and Sustaining a
employees who steal from the company are given a
Values-Based Corporate Culture.” In his signature
second chance.
growl, Zimmer—easily recognizable from his
As a gesture of solidarity, Zimmer always
“You’re gonna like the way you look” tagline in the
limited his own compensation to ten times the
TV commercials—laid out the company’s employee-
salary of the average store manager. (He stepped
centered ethical practices.
down as CEO in 2011.) “The single most important
In 1973, Zimmer and his college roommate
element of organizational success is trust,” he
started Men’s Wearhouse with $7,000. “We didn’t
explained. “The leaders need to be winners who
have a cash register; we had a cigar box,” he said.
inspire people.”
“We’d write out receipts by hand. It was not mate-
He also recommended that students start their
rially different from a lemonade stand.” Now it’s
own businesses. “Corporate America is less trust-
a multibillion-dollar, publicly traded company.
worthy today than when I was starting out,” he
He explained that Men’s Wearhouse strives
said. But he encouraged budding entrepreneurs to
to benefit its employees and customers as strongly
get some experience, first at retail, then at a design
as its shareholders. The company pays 70 percent
house, and at some point “try to have one good flash
of employee health insurance premiums and offers
of accounting.”
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