In creating Rent the Runway, Hyman said the experiment was to link that millennial mindset with a direct attack on the success of "fast fashion"—chains like H&M, Zara and Forever 21. Amid a recession and stagnant wages, she saw that there was a way to get young women into higher quality clothing.
Ilse Metcheck, president of California Fashion Association, said Rent the Runway's growth has been driven by the democratization and high-speed of style changes in fashion, now intensified by social media. Rent the Runway customers include Kelly Osbourne, the newest star from the Kardashian clan, Kendall Jenner, women from the TV show "The Bachelor" and even Beyoncé.
"Trends happen on average every 10 weeks, so if you really want to feel in step with fashion you need to change it every 10 weeks," Metchek said. In other words, the transience of renting matches the transience of what a person (and society) may consider fashionable at any given moment, she said.
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Hyman predicts that in five to 10 years, women's closets will look a lot different. There will still be a portion of the closet filled with clothes that are owned, but another portion will be in constant rotation, filled with rented items. "Our customer represents a new world order of woman, not defined by age but by being active and busy in every aspect of life," Hyman said. "It's a woman who wants to reinvent herself."
One of Hyman's favorite customer stories came from a 30-year-old woman in Washington, D.C. who was introduced to Rent the Runway by her grandmother, who wanted to look her best for her husband on Sunday when they attended church. She saw how confident her grandmother looked and decided to rent herself. "If Beyoncé and a grandma who goes to church rent from Rent the Runway, any woman can," Hyman said.
—By Paula Vasan, Special to CNBC.com