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Urban Outfitters enters the clothing rental business

Renata Sago May 22, 2019
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Urban Outfitters is the latest company to enter the fast-growing retail rental industry.
Stephanie Keith/Getty Images

Urban Outfitters is the latest fashion retailer to launch a clothing rental business, Nuuly. For $88 per month, customers will receive six items — from handbags and shoes to shirts and jackets from various designers.

They can hold onto the items for a month, or buy them. In a fast-fashion world, younger people are frequently taking a “one and done” approach to wearing clothes.

“I barely ever buy clothes anymore,” said Arica Latimer, a 31-year-old Chicagoan who has been renting her clothes for the past five years.

Latimer has a heavy rotation of Instagram-worthy looks she wears to work and special events. For $150 a month, she has an unlimited subscription to Rent the Runway.

“I’ve always been interested in high quality pieces, but I don’t have the money to buy it,” she said, noting that she occasionally buys some of the pieces she rents.

There are thousands of consumers like her, and companies like Express and Ann Taylor have jumped in with their own rental services, some priced as low as $50 a month. According to analysts, the global retail rental market is expected to hit $1.9 billion by the end of 2023.

Retail rental is a good way for fashion companies to streamline operations, according to Milton Pedraza, chief executive of The Luxury Institute, a research and consulting firm.

“They’re not producing as much, which means they have lower inventory costs. They’re not wasting as much. They don’t have to discount,” he said.

Daphne Howland with industry publication Retail Dive says the model gives retailers insight into consumer tastes without making having to heavily invest in research and development. But one big problem is logistics.

“You’re basically signing up to agree to returns from the get-go, and returns are a really expensive part of the business,” she said.

Many rental companies have hired outside logistics firms to help. But Urban Outfitters says it will build out its own logistics division for Nuuly.

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