Dive Brief:

• Rent the Runway is closing its brick and mortar locations. Instead, the company will focus on its dropbox network (at places like WeWork sites, Nordstrom Local stores, West Elm stores and hotels), which the company says serves more customers. Its retail workers were laid off in March, the company said in an email.

• The apparel rental site had stores in five cities, New York, Chicago, Los Angeles, San Francisco and Washington, D.C., according to CNBC, which first reported the news. In an email, the company said nearly half its clientele reside outside such major cities, and that it ships to 76% of the zip codes in the U.S.

• The pandemic sped up the apparel rental site's plans, according to COO Anushka Salinas. "The closure of our retail stores is something we had long considered as part of the evolution of our overall business strategy as the primary use-case of our stores for the past few years has been pick-up and drop-off, and was a decision we accelerated during the pandemic," Salinas said in an emailed statement. 

Dive Insight:

Rent the Runway was already grappling with some growing pains before the pandemic interfered. Last year the rental company was beset by fulfillment snags.

But it also continued to innovate its offer. Earlier this year, before the full impact of the pandemic was felt, the company expanded its subscription options after customers demanded a middle tier. That kind of work will go on, Salinas said.

"We will continue to innovate our experience to best suit the changes in our customer's lives, even in a new normal," Salinas said. "We always believed in Rent the Runway's physical presence, and to best meet our customers where they are now, will leverage the technology we've already built to transition."

The closure of the brick-and-mortar stores will make that more difficult, however, due to the "intensity of competition and inherent volatility of the online environment," according to Greg Sterling, VP of Insights and digital marketing firm Uberall. 

"Retail brands that exist entirely online, with some notable exceptions, are generally less 'stable' than a combined online-offline presence," he said in emailed comments. "Stores support e-commerce by giving people confidence to buy online, knowing they can return products locally. In Rent the Runway's case their offline network of drop boxes might be enough. But it will require them to build a much stronger brand to succeed over the long term."