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Inside Rent The Runway's Secret Dry-Cleaning Empire

The most important job at RTR is not engineering, web design, or marketing. It's dry cleaning, and these guys are the Navy Seals of stains.

  • <p>Most people think of Rent the Runway--which rents designer dresses at a fraction of the retail price for women to wear to events--as an innovative fashion retailer powered by impressive technology. And it is.</p>
  • <p>But, when the company moves to its new 160,000 square foot warehouse, it will also officially become the nation's single largest dry cleaner, as measured by pounds per hour.</p>
  • <p>The less time one of the company's 65,000 garments spends sitting in the warehouse, the better. Even if a customer doesn't need her rental for a few days, Rent the Runway wants it processed ASAP to save on shipping costs.</p>
  • <p>And, of course, the more times RTR can rent an item, the more money it makes on each sparkly gown it owns.</p>
  • <p>Stains have the potential to make Rent the Runway's otherwise tight operation, well, messy. About half of the dresses worn come back with smears, blotches, and smudges in need of hand treatment. Imagine the potential bottleneck those items could create.</p>
  • <p>Having skilled workers who can tackle stray steak grease fast, without compromising the integrity of a delicate dress, keeps the process moving at a profitable pace.</p>
  • <p>Those people, however, are unicorns. "The hardest position to recruit has not been engineers, it has been spotters," <a href="http://www.fastcodesign.com/3035238/innovation-by-design-2014/borrowing-is-the-new-owning" target="_self">Jennifer Hyman, Rent the Runway's CEO</a>, told me.</p>
  • <p>To avoid ruining clothing, there is a methodical 20-step process that spotters--industry parlance for stain-removel experts--use to attack a stain. Skilled technicians, however, don't need to go through that time-consuming order of operations.</p>
  • <p>"The art form, so it doesn't take 15 minutes per stain, is looking at it and going I have a pretty good idea of what this is, and it comes out, and it takes less than two minutes," Charles Ickes, Rent the Runway's vice president of operations, said.</p>
  • <p>Rent the Runway spotters average about 30 dresses per hour.</p>
  • <p>Good spotters who understand the nuances of garments and their blemishes are rare, and getting rarer, according to the National Cleaner's Association.</p>
  • <p>Faced with a dying breed of skilled workers, RTR did what any good tech company does: poached.</p>
  • <p>Before coming to RTR three years ago, Ickes worked in operations at <a href="http://www.madamepaulette.com/" target="_blank">Madame Paulette</a>, a high-end dry cleaner in Manhattan that does everything from the restoration of Joe Dimaggio's uniform to cleaning couture designs. Madame Paulette employs the best spotters.</p>
  • <p>The supply of good, willing spotters from established cleaners still isn't enough to fill RTR's dress demands. Of the 13 spotters that work at the dress delivery service, about half came from the industry. The rest, the company has trained, and it plans to double the work force in the next three months.</p>
  • 01 /14

    Most people think of Rent the Runway--which rents designer dresses at a fraction of the retail price for women to wear to events--as an innovative fashion retailer powered by impressive technology. And it is.

  • 02 /14

    But, when the company moves to its new 160,000 square foot warehouse, it will also officially become the nation's single largest dry cleaner, as measured by pounds per hour.

  • 03 /14

    The less time one of the company's 65,000 garments spends sitting in the warehouse, the better. Even if a customer doesn't need her rental for a few days, Rent the Runway wants it processed ASAP to save on shipping costs.

  • 04 /14

    And, of course, the more times RTR can rent an item, the more money it makes on each sparkly gown it owns.

  • 05 /14

    Stains have the potential to make Rent the Runway's otherwise tight operation, well, messy. About half of the dresses worn come back with smears, blotches, and smudges in need of hand treatment. Imagine the potential bottleneck those items could create.

  • 06 /14

    Having skilled workers who can tackle stray steak grease fast, without compromising the integrity of a delicate dress, keeps the process moving at a profitable pace.

  • 07 /14

    Those people, however, are unicorns. "The hardest position to recruit has not been engineers, it has been spotters," Jennifer Hyman, Rent the Runway's CEO, told me.

  • 08 /14

    To avoid ruining clothing, there is a methodical 20-step process that spotters--industry parlance for stain-removel experts--use to attack a stain. Skilled technicians, however, don't need to go through that time-consuming order of operations.

  • 09 /14

    "The art form, so it doesn't take 15 minutes per stain, is looking at it and going I have a pretty good idea of what this is, and it comes out, and it takes less than two minutes," Charles Ickes, Rent the Runway's vice president of operations, said.

  • 10 /14

    Rent the Runway spotters average about 30 dresses per hour.

  • 11 /14

    Good spotters who understand the nuances of garments and their blemishes are rare, and getting rarer, according to the National Cleaner's Association.

  • 12 /14

    Faced with a dying breed of skilled workers, RTR did what any good tech company does: poached.

  • 13 /14

    Before coming to RTR three years ago, Ickes worked in operations at Madame Paulette, a high-end dry cleaner in Manhattan that does everything from the restoration of Joe Dimaggio's uniform to cleaning couture designs. Madame Paulette employs the best spotters.

  • 14 /14

    The supply of good, willing spotters from established cleaners still isn't enough to fill RTR's dress demands. Of the 13 spotters that work at the dress delivery service, about half came from the industry. The rest, the company has trained, and it plans to double the work force in the next three months.

Watching Ramon Leiva lift a nail-polish stain out of a dress is mesmerizing. He squeezes pungent chemicals out of plastic bottles and rubs the dark purple streaks with a brown, soft-bristle brush to see if the offending substance will come out. In less than 30 seconds, he finds the right treatment, and the stain begins to lighten. At that point, he starts hitting the dress with the brush until the discoloration disappears completely. It's an incredibly satisfying sort of magic.

"For me, this is nail polish," says Rent the Runway's head spotter, the industry term for a stain removal expert. The stain indeed looks streakier than, say, a splash of pinot noir. But a spotter-in-training thought the markings came from a gorier incident, maybe a torn hangnail or accidental poke of a corsage pin. "When it's blood, you see a drop. When you see nail polish, it looks like a mark," instructed Ramon.

That intuition is the art of dry-cleaning, and it's a key part of Rent the Runway's success; getting dresses cleaned and ready to ship out as fast as possible is essential to RTR's model. On that promise, the company has raised $54.4 million dollars in funding, and is on track to make $100 million in revenue this year, estimates Forbes. Most people think of Rent the Runway—which rents designer dresses at a fraction of the retail price for women to wear to events—as an innovative fashion retailer powered by impressive technology. And all of that is true. But, when the company moves to its new 160,000 square foot warehouse, it will also officially become the nation's single largest dry cleaner, as measured by pounds per hour.

The less time one of the company's 65,000 garments spends sitting in the warehouse, the better. Even if a customer doesn't need her rental for a few days, Rent the Runway wants it processed ASAP to save on shipping costs. And, of course, the more times RTR can rent an item, the more money it makes on each sparkly gown it owns.

Stains have the potential to make Rent the Runway's otherwise tight operation, well, messy. About half of the dresses worn come back with smears, blotches, and smudges in need of hand treatment. Imagine the potential bottleneck those items could create. Having skilled workers who can tackle stray steak grease fast, without compromising the integrity of a delicate dress, keeps the process moving at a profitable pace.

Those people, however, are unicorns. "The hardest position to recruit has not been engineers, it has been spotters," Jennifer Hyman, Rent the Runway's CEO, told me.

Everything You Didn't Know About Dry Cleaning

Spotting is a science. On top of knowing what chemicals work with which stains, the trade requires knowledge of how solutions react with fabrics. Before applying amyl acetate, a paint solvent, Ramon checked the dress's label for the material. Acetone, for example, can burn holes in clothing, which in Rent the Runway's case would mean lost inventory and lost money.

There's a methodical 20-step process most spotters use to attack a stain to avoid ruining clothing. Skilled technicians, however, don't need to go through that time-consuming order of operations. "The art form, so it doesn't take 15 minutes per stain, is looking at it and going, 'I have a pretty good idea of what this is,' and it comes out, and it takes less than two minutes," Charles Ickes, Rent the Runway's vice president of operations, shouted to me over the whirring of dry-cleaning machines inside the company's 40,000 square foot Secaucus warehouse. His guys average about 30 dresses per hour.

Before we get to what makes good spotters so rare, first one has to understand the dark art that is dry-cleaning.

Here's something mind blowing: there is nothing dry about dry-cleaning. It should really be called not-water cleaning. Every dress that gets "dry" cleaned comes in contact with liquid, usually solvent. Rent the Runway has three different machines for three solvents types, and another machine that does a super-delicate mist wash. If a piece is just plain dirty, sans spots, it goes through whatever machine Rent the Runway has determined will extend the dress's lifespan. (The barcode on the dress determines its fate.) The machines known as "dry-to-dry" machines also dry the gowns, after which they go through a steam tunnel that does the work of wrinkle removal, unless a dress has a lot of structure and needs personal attention.

If a dress comes back with a spill on it, though, it goes to a spotter. This part requires deep knowledge of fibers, materials, and chemicals. "Dry" stains like makeup, oil, and nail polish are treated differently than "wet" stains, which need water to come out. There are chemicals for animal-based stains, and others for animal-based clothing.

Good spotters who understand the nuances of garments and their blemishes are rare, and getting rarer, according to the National Cleaner's Association. "When I interview somebody they'll say, 'Oh, I'm a spotter,' and they're just scary bad," says Ickes. Candidates will boast using Clorox and Spray-n-Wash as cleaning agents, for example.

Charles Ickes

Ickes attributes the demise of the art to the "commoditization" of the industry. Most dry cleaners don't want to invest—spotters are the highest paid dry-cleaning specialists—nor do they have the incentive. "A dry cleaner doesn't want to own that stain," explained Ickes. Meaning: They don't want to try too hard on that weird yellow spot only to ruin a shirt, because then you'll blame them. Spotting gone wrong often results in discoloration or holes. Skilled spotting also takes time, and since mom and pop shops charge per piece, they want to cycle through as many garments as possible in a given day. Most of the time, a neighborhood establishment will try a little bit, and if it doesn't work send the blouse back with a note saying something along the lines of "sorry, we tried."

On average, a given Rent the Runway piece goes out to customers about 30 times, at which point it gets sent to a sample sale or sold on the site. The longer a dress lasts, the more revenue the company squeezes out of its inventory. A stained Badgley Mischka is as worthless as a ripped one. Hence the need for a deft, adept spotter. "In our business, that's the holy grail," said Hyman.

Poach Like A Startup

Faced with a dying breed of skilled workers, RTR did what any good tech company does: poached.

Before coming to RTR three years ago, Ickes, a burly white man with a deep laugh he uses often, worked in operations at Madame Paulette, a high-end dry cleaner in Manhattan that does everything from the restoration of Joe DiMaggio's uniform to cleaning couture designs. Madame Paulette employs the best spotters.

Initially, Hyman approached Madame Paulette for help setting up her dry-cleaning operation. For the first few months, Rent the Runway had used a third-party operator. "Outsourcing was extremely expensive, unreliable," said Ickes, who gave Hyman advice in the early days before he took on an official role. "You can't control your quality whatsoever." After a few months of consulting, Hyman convinced Ickes to join her full time, and he brought along one of the best spotters at Madame Paulette, Ramon, in addition to a couple of other spotters. (He couldn't afford the top guy there.)

The supply of good, willing spotters from established cleaners still isn't enough to fill RTR's dress demands. Of the 13 spotters that work at the dress delivery service, about half came from the industry. The rest, the company has trained, and it plans to double the work force in the next three months.

Rent the Runway offers a journeyman program open to any employees who want to learn the trade. Spotting is one of the most lucrative positions in the warehouse; a technician can make up to $30 an hour. The program takes almost two years in total and includes classes from the NCA and Wilson Chemical. Training consists of 90 days as a trainee with classroom and on-the-job training, six months as an apprentice, and a year as a journeyman.

The NCA wouldn't give an exact figure, but assures me that it's a big financial investment for the company. "As far as the training is concerned," a representative told me, "it doesn't guarantee success, but it has a lot do with success."

I asked Ickes how he convinced Ramone to leave. "It wasn't that hard," he said. "Madame Paulette is a crazy, high-pressure place." Rent the Runway isn't a difficult sell to most spotters. Unlike the dry-cleaning industry, it's growing. And, unlike a family-run business, the company offers benefits and the perks of startup culture. "To be honest with you, I came to Rent the Runway because I saw this company blossoming," said Marty Hochadel, the senior manager of dry cleaning. "And it seems like a real good thing to be a part of."

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