FashionPass, a clothing subscription service founded in 2016 in the vein of Rent the Runway, but for beachier, breezier, high-street looks, is suing the company that inspired it for what it calls “monopolistic and anti-competitive conduct.”
In a complaint filed in the superior court of the state of California Monday, FashionPass alleged that Rent the Runway used its “superior market power and financial capabilities to coerce FashionPass’s top suppliers to refuse to sell merchandise to FashionPass” in a bid to “eliminate competition” rather than “fairly compete” with FashionPass.
FashionPass further claimed that Rent the Runway strong-armed brands such as ASTR the Label, Blank NYC, Citizens of Humanity, Dress the Population, the Jetset Diaries, Sanctuary, Show Me Your Mumu and Yumi Kim, into designating it as its “exclusive” customer in the fashion rental business. (All the aforementioned labels are listed among Rent the Runway’s designers.)
“Rental income generated by FashionPass since August 206 is substantially comprised of revenues generated from the rental of merchandise from said manufactures,” the complaint noted. As a result of Rent the Runway’s alleged violations of the Business and Professions Code, “and [its] conduct in furtherance of those violations,” FashionPass has “lost revenue and profits, and has thereby suffered injury in fact.”
The lawsuit casts a shadow on Rent the Runway’s recent good fortune. A new round of financing last week, for instance, propelled its valuation to the $1 billion “unicorn” level. And earlier this month, the 10-year-old firm announced a partnership with West Elm to offer for lease curated “bundles” of decorative pillows, throws, shams and quilts for living rooms and bedrooms.
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FashionPass, as a Vox article recently pointed out, appears to be targeted at Instagram power users—sometimes known as “influencers”—between the ages of 24 and 32. The firm’s complaint said it “particularly concentrates on styles designed for women in their 20s and 30s who wish to wear clothing and accessories that reflect current trends from sought-after brands.” FashionPass, it added, carries a “selection of brands primarily focused on casual everyday apparel, wedding guest dresses, vacation wear and work attire.”
Rent the Runway’s 9 million members cut a broader swath, from highschoolers looking for a dress for homecoming to aspiring C-suiters to women who don’t want to invest in maternity clothing they’ll never wear again. While Rent the Runway has “historically emphasized high-end, event-based attire, such as dresses for galas and formal events,” according to the legal document, the company’s appeal includes FashionPass’s “target customers,” making them direct competitors.
Both FashionPass and Rent the Runway offer to send customers a certain number of items, with no limits on exchanges, for a flat monthly fee. FashionPass’s model is organized into three tiers: the $79 “Socialite” (two garments and one accessory), the $109 “Trendsetter” level (three garments and two accessories) and the $139 “Wanderlust” level (four garments and three accessories.) Rent the Runway’s “Unlimited” customers can borrow four items at a time for $159 per month.
Rent the Runway did not respond to a request for comment.