Latest news with #RentTheRunway
Wall Street Journal
2 days ago
- Business
- Wall Street Journal
How Urban Outfitters' Nuuly Stole the Show From Rent the Runway
Rent the Runway RENT -2.07%decrease; red down pointing triangle might have introduced young consumers to the idea of renting their wardrobes. Nuuly, a unit of Urban Outfitters URBN -2.77%decrease; red down pointing triangle, seems to be the one that is actually making it work. Renting clothes isn't a cheap business. It requires being good at everything from trend forecasting to streamlining shipping logistics and industrial-scale dry cleaning. Unlike most e-commerce companies, rental platforms also have to move inventory several times per item.
Yahoo
04-08-2025
- Business
- Yahoo
Rent the Runway Boosts Eco-friendly Options, Aligning with Circular Fashion Demand
The Global Online Clothing Rental Market is set to grow from USD 1.465 billion in 2025 to USD 2.265 billion by 2030, driven by sustainable fashion demand. Key players like Rent the Runway and Nuuly lead with tech innovations and strategic partnerships. Explore market dynamics, trends, and regional insights. Global Online Clothing Rental Market Dublin, July 30, 2025 (GLOBE NEWSWIRE) -- The "Online Clothing Rental Market - Forecasts from 2025 to 2030" report has been added to Global Online Clothing Rental Market is expected to grow from USD 1.465 billion in 2025 to USD 2.265 billion in 2030, at a CAGR of 9.11%.The Global Online Clothing Rental Market provides a comprehensive analysis of the rapidly evolving online clothing rental industry, offering industry experts actionable insights into market dynamics, competitive strategies, and emerging trends. This research delves into the market's growth trajectory, driven by increasing consumer demand for sustainable and cost-effective fashion solutions, with a focus on key segments, regional trends, and technological advancements. By examining market drivers, restraints, opportunities, and competitive intelligence, the study equips stakeholders with the tools to navigate this dynamic sector Overview and ScopeThe Global Online Clothing Rental Market defines the market as platforms and services enabling consumers to rent clothing for various durations, encompassing subscription-based, peer-to-peer, and other business models. The scope covers end-users (men, women, and kids), product types (traditional, formal, casual, and party wear), and geographic regions, including North America, Europe, Asia Pacific, South America, and the Middle East & Africa. The study highlights the market's projected growth, driven by rising eco-consciousness, technological advancements, and shifting consumer preferences toward access-based consumption. It also addresses challenges such as logistical complexities and competition from resale markets, providing a balanced perspective on the industry's Environment and AnalysisIn the Global Online Clothing Rental Market the competitive environment and analysis section offers a detailed examination of major players, their strategies, and recent developments shaping the industry's landscape. The market is moderately concentrated, with key players like Rent the Runway, Nuuly, and Gwynnie Bee leading through innovative business models and strategic partnerships. The competitive intelligence highlights how these companies leverage technology, sustainability, and customer-centric approaches to maintain market dominance and capture emerging Developments from Market PlayersOne significant development comes from Rent the Runway, a pioneer in the online clothing rental space. In January 2025, Rent the Runway announced partnerships with multiple sustainable fashion brands to expand its eco-friendly offerings, aligning with growing consumer demand for circular fashion practices. This move enhances its inventory with sustainable options, appealing to environmentally conscious consumers and reinforcing its position as a market leader. Additionally, Rent the Runway's integration of AI-driven recommendation engines has improved personalization, enabling curated selections based on customer preferences, which boosts user satisfaction and retention. This strategic focus on sustainability and technology underscores Rent the Runway's commitment to addressing both market trends and consumer notable development is from Nuuly, a subscription-based rental service under Urban Outfitters. In July 2023, Citi analysts highlighted Nuuly's potential as a growth engine for Urban Outfitters, citing its robust subscriber base of over 250,800 and its innovative subscription model. Nuuly's recent expansion into casual and athletic wear has broadened its appeal, particularly among millennials and Gen Z, who prioritize flexibility and affordability. By offering competitive pricing and a diverse inventory, Nuuly has strengthened its market share, positioning itself as a formidable competitor in the Global Online Clothing Rental Market. Its focus on data analytics to optimize inventory management further enhances operational efficiency, reducing costs and improving customer InsightsThe competitive landscape of the Global Online Clothing Rental Market is shaped by intense rivalry and innovative strategies. Companies are increasingly adopting AI and machine learning for personalized recommendations and inventory forecasting, as seen with Rent the Runway and MyWardrobeHQ's platform upgrades in March 2024. These technological advancements reduce operational inefficiencies and enhance customer engagement. Additionally, partnerships with designers and influencers, as pursued by tier-2 players like GlamCorner and Style Theory, strengthen brand visibility and market penetration in regional markets. The market also sees growing merger and acquisition activity, such as Rent the Runway's collaboration with Saks Off 5th in July 2022 to integrate pre-owned designer items, expanding its value Segmentation and Regional InsightsThe study segments the market by end-user, product type, business model, and geography, providing granular insights into growth opportunities. The women's segment dominates, accounting for 57.2% of the market in 2023, driven by high adoption rates among fashion-conscious consumers. The subscription-based model is gaining traction, offering convenience and curated experiences, while the Asia Pacific region emerges as the fastest-growing market due to increasing digital adoption and fashion consciousness in countries like India and China. These insights guide stakeholders in targeting high-potential segments and Dynamics and OpportunitiesThe Global Online Clothing Rental Market is propelled by rising consumer awareness of sustainable fashion and the convenience of online platforms. However, challenges such as logistical hurdles and competition from second-hand clothing markets require strategic investments in technology and consumer education. Opportunities lie in expanding into underserved markets, leveraging AI for personalization, and forming eco-friendly partnerships, as demonstrated by key players' recent initiatives. The study's comprehensive analysis, including Porter's Five Forces and industry value chain, equips industry experts with the knowledge to capitalize on these trends and navigate competitive pressures Benefits of this Report: Insightful Analysis: Gain detailed market insights covering major as well as emerging geographical regions, focusing on customer segments, government policies and socio-economic factors, consumer preferences, industry verticals, and other sub-segments. Competitive Landscape: Understand the strategic maneuvers employed by key players globally to understand possible market penetration with the correct strategy. Market Drivers & Future Trends: Explore the dynamic factors and pivotal market trends and how they will shape future market developments. Actionable Recommendations: Utilize the insights to exercise strategic decisions to uncover new business streams and revenues in a dynamic environment. Caters to a Wide Audience: Beneficial and cost-effective for startups, research institutions, consultants, SMEs, and large enterprises. Report Coverage: Historical data from 2022 to 2024 & forecast data from 2025 to 2030 Growth Opportunities, Challenges, Supply Chain Outlook, Regulatory Framework, and Trend Analysis Competitive Positioning, Strategies, and Market Share Analysis Revenue Growth and Forecast Assessment of segments and regions including countries Key Attributes: Report Attribute Details No. of Pages 140 Forecast Period 2025 - 2030 Estimated Market Value (USD) in 2025 $1.47 Billion Forecasted Market Value (USD) by 2030 $2.27 Billion Compound Annual Growth Rate 9.1% Regions Covered Global Company Profiling (Strategies, Products, Financial Information, and Key Developments) Rent the Runway Gwynnie Bee Tulerie Rainey's Closet FLYROBE Armoire Nuuly Vince Market Segmentation By End-Users Men Women Kids By Product Type Traditional Formal Casual Party Wear By Business Model Subscription-Based Peer-to-Peer Others By Geography North America USA Canada Mexico South America Brazil Argentina Others Europe Germany France United Kingdom Spain Italy Others Middle East and Africa Saudi Arabia Israel UAE Others Asia Pacific China Japan South Korea India Indonesia Thailand Taiwan Others For more information about this report visit About is the world's leading source for international market research reports and market data. We provide you with the latest data on international and regional markets, key industries, the top companies, new products and the latest trends. Attachment Global Online Clothing Rental Market CONTACT: CONTACT: Laura Wood,Senior Press Manager press@ For E.S.T Office Hours Call 1-917-300-0470 For U.S./ CAN Toll Free Call 1-800-526-8630 For GMT Office Hours Call +353-1-416-8900Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Forbes
22-07-2025
- Automotive
- Forbes
The Harsh Math Of Fashion Rental: Fraud, Losses And Uncertainty
Getting her to be happy with rental garments is harder than it looks. Last week, Christine Hunsicker, the former CEO of fashion rental company Caastle, was arrested for allegedly defrauding investors of $300 million and she posted bail of $1 million. Caastle was previously known as a fashion high flyer, enabling fashion rental for well-known brands like Ann Taylor, Ralph Lauren, Banana Republic and others. At its peak, I was told the company was valued at over $1 billion. Another company worth over $1 billion at its peak is the better-known fashion rental company, Rent The Runway. There's no fraud there but today you can buy all the shares of Rent The Runway for about $20 million. If you did that, you'd also be the owner of almost $400 million in debt and pretax losses of $73.5 million in the last reported 12 months. Why Is Fashion Rental So Hard? Fashion rental companies present themselves in many ways to investors. But at their heart, they are leasing companies. In the leasing business, one word drives the profitability or loss of the business: 'residuals.' It refers to what an asset is worth when the lease is over. Why Residuals Are So Important Residual values drive pricing and ultimately, profitability. Let's say you're Hertz. You buy cars in bulk so you get them at a very good price. The price is so good that when the car is done being rented, the price you sell it for, the 'residual value,' is equal to what you paid for the car. In that circumstance, the only cost of owning the asset is the cost of your capital during the time you own it. You don't ever have to pay for the car since you sell it for what you paid. If rental cars were worthless when they were done being rented, the cost of renting would have to be a lot higher for Hertz to be profitable. And that's the problem with fashion rental. When a garment is done being rented, it has to be sold and most garments are worth only a fraction of their original retail price when they go into the resale market. More important, predicting the value of used garments at scale is almost impossible. Each one is so unique that a $300 million revenue company like Rent The Runway is faced with an almost impossible task. It would be safe to assume that garments are worth nothing or nearly so at the end of the rental cycle but that would mean charging customers more and attracting customers to rent garments is a tough enough business as it is. Residuals Aren't The Only Thing Residuals are key but fashion rental has other challenges too. Hertz customers pickup and dropoff the cars they rent. Fashion rental often has to be shipped and sent back and that adds cost. And the dry cleaning. It's hard to get scale in dry cleaning the way Hertz can run an efficient car wash at an airport location. And the competition. Fast fashion and fashion resale/vintage with their low prices, are often an enticing alternative to fashion rental. And the fashion change. Women now wear a lot less formal clothing in offices and the net increase in work from home reduces demand for dress-up clothing. Rent The Runway's stock price is the market's assessment of the likelihood that all these challenges can be figured out and turned into an enduringly profitable business. The market doesn't seem to be counting on it. Can AI Help? You would think that artificial intelligence would be just the thing to help a company predict what a garment would be worth at the end of its rental cycle. Yasmin Topia, CEO of which claims to be the fastest-learning AI in the fashion industry, says 'AI will never be perfectly accurate at predicting the value of a garment six months into the future.' Topia explains the best models use known facts—like brand, material, and season—combined with real-time signals such as social buzz, sales trends, and influencer activity. As far as I have seen, no one has created a model for predictive valuation of inventory yet that is entirely accurate. Topia says it's almost impossible because 'a celebrity may fall from grace, a labor or other scandal can happen or a designer's star might take off suddenly.' Where It Goes From Here We don't know where AI will take this business and at the very least it's going to take time for AI get good at predicting the value of garments and accessories in the future. For now, the uncertainty around residual value is the key reason why fashion rental is such a tough business. So the companies that most people hear about are the ones that are allegedly fraudulent or failing. But there's a segment of consumers that want and will pay for fashion resale so so it's a certainty that companies will keep trying. Urban Outfitters, which also owns Anthropologie, Free People and other brands, has created a rental service called Nuuly. The company says it has 380,000 subscribers and that it's profitable. But it's not clear how Urban Outfitters accounts for its Nuuly business. One thing it has told me is that Nuuly buys its garments from other Urban Outfitters brands at cost. It appears that Nuuly is not charged a full load including design and other overhead costs that Urban Outfitters pays. I have not been able to get information on how Nuuly deals with residual values so it's hard to say what the true performance of the Nuuly business is. If Nuuly is truly profitable on a standalone basis, that's a breakthrough for the fashion rental business. Because the numbers are not broken out, there is reason for skepticism. Eventually, someone is going to figure out the fashion rental business and how to make money at it. When that happens, it's likely to look a lot like other rental and leasing companies. It's not a data and logistics business as Rent The Runway has described itself in the past, it's a grinding business where understanding residual value is the key to success and proper pricing. Until then, failure and fraud will get headlines but over time, residual values and other costs will get managed and priced properly and profits can be made.
Wall Street Journal
17-06-2025
- Business
- Wall Street Journal
Rent the Runway Sees Rebound in Subscribers, and Aims to Add More Styles to Keep Them
Rent the Runway's active-subscriber numbers have rebounded after hitting a multiyear low earlier this year, and the online clothing-rental company is making its largest-ever investment in inventory to keep the momentum going. The company had over 147,000 active subscribers renting wares from Gucci, Ulla Johnson, Oscar de la Renta and many other labels at the end of its first quarter ended April 30, up nearly 23% from the previous quarter. While the company often sees a surge of subscribers in the late spring just before proms and graduations followed by the June wedding season, its latest count tops first-quarter figures in recent years. Whether Rent the Runway remains an appealing option will depend in part on whether consumers, some of whom are spending more cautiously, decide that monthly apparel rental fees—ranging from roughly $100 to $315—are worth it. Rent the Runway's finance chief, Sid Thacker, thinks they will, particularly as the company adds to the brands and styles it offers. 'We're providing all of this at tremendous value,' he said. 'Customers are getting thousands of dollars worth of clothing for around $100-plus per month.' Shoppers several years ago flocked to apparel-rental options, embracing the access to designer clothes for weddings, business meetings and other events without having to shell out hundreds or thousands of dollars. But since the pandemic, the apparel-rental market has taken a hit. Many consumers still work from home and even within the workplace are dressing more casually. Meanwhile, whipsawing tariff announcements have left some shoppers wary. They also have more rental options, with newer entrants such as Nuuly, launched in 2019 by Urban Outfitters, increasingly capturing shoppers' attention. For Rent the Runway, the crosscurrents have hit hard. The company's shares plummeted nearly 90% in the year after going public in 2021 and have been down significantly since. The company has also hemorrhaged active subscribers and has yet to turn a profit. Rent the Runway executed a reverse stock split last year to stay listed, while also cutting around $40 million in costs over three years. But in its latest quarter, the company seemed to shift gears. Along with the record number of active members—subscribers account for nearly 90% of Rent the Runway's revenue—retention was the strongest it has been in four years, Thacker said. And the company was nearly cash-flow break-even in the fiscal year compared with burning around $100 million a few years ago, he said. Revenue in the latest quarter fell 7.2%, to nearly $70 million, compared with a year earlier. By Monday afternoon, Rent the Runway shares were down nearly 40% from the start of this year. But Thacker expects the positive change to continue. One reason is inventory. Adding brands and styles holds subscribers' interest, which is why the company plans to double its inventory in this year and add around 90 new labels to its roster of hundreds of brands. Rent the Runway declined to say how much it is investing in inventory. Rent the Runway has worked to make various designer dresses, skirts and other items easier on the balance sheet. For one, some brands design exclusively for Rent the Runway, wares that tend to come at a significant discount in exchange for access to the company's customers. Some brands also provide inventory at no or minimal cost and then take a share of the revenue when items are rented. Roughly 70% of the company's inventory is expected to fall into one of these two categories in the current fiscal year, up from around 20% in 2019. And as rental businesses shed some of the stigma that some people associate with wearing used clothing, shoppers are more willing to temporarily freshen up their wardrobe without the expense of a purchase, according to Thacker. Concerns about tariff-driven price increases on clothing, toys and more could add to the appeal of renting apparel, he said. But analysts question whether stretched consumers will stick with their subscriptions. 'The rental option is interesting in that it affords newness at a reasonable price. But it's not necessarily the most economical,' said Simeon Siegel, a managing director at BMO Capital Markets. 'Plenty of people would say that a stretched consumer will cancel their subscriptions.' That likelihood increases if tariffs drive subscription prices up, analysts said. Rent the Runway doesn't have significant direct exposure to tariffs, Thacker said. Its brand partners, however, might have to raise their own prices to offset the levies, which could push up Rent the Runway's costs. Asked if subscription prices would go up as a result, the CFO said: 'We're trying to take care of customers.' Rent the Runway's efforts to transform the business come as the overall luxury market is struggling, said Herb Blank, chief quantitative analyst at stock-valuation and forecasting firm ValuEngine. The company has a history of losses, and analysts appear to have stopped covering it, an indicator on the company's performance, he said. This month, for instance, no analysts were on the earnings call, compared with two a year ago and eight in June 2023, according to S&P Global Market Intelligence. ValuEngine stopped covering the company this month. 'For a company that's really under the gun, they are doing everything to try to right the ship,' Blank said. 'It's just … they're swimming upstream.' Write to Jennifer Williams at
Yahoo
17-06-2025
- Business
- Yahoo
Nuuly is dominating the apparel rental market
This story was originally published on Retail Dive. To receive daily news and insights, subscribe to our free daily Retail Dive newsletter. Apparel rental company Nuuly has 'quickly become an industry leader,' with over twice the active subscribers as the next-largest apparel subscription business in the U.S., Rent the Runway, according to a Walls Fargo note lead by Ike Boruchow. The Urban Outfitters-owned company has captured subscribers that either previously used apparel rental or have never rented before. Most of its under 30 customers this year were new to rental. Nuuly also maintains one of the highest retention rates in the industry, with a 90% retention rate in year one and around a 40% retention rate in years three to five, per the report. One of Nuuly's most important competitive advantages is its ability to obtain inventory at cost from its sister companies, including Urban Outfitters, Anthropologie and Free People. Those products make up around 45% of its current inventory, according to Wells Fargo analysts. In Urban Outfitters' latest earnings, Nuuly's net sales were $124.4 million — an almost 60% increase year over year. The company saw a 53% increase in average active subscribers, which contributed to a 60% increase in brand revenue and added almost 400 basis points of revenue growth to Urban Outfitters' top line. 'The performance at Nuuly over the past year has fortified our confidence that our business model is strong, and the rental market opportunity is very large,' Urban Outfitters COO Frank Conforti said on a first quarter 2026 earnings call with analysts. 'We are thrilled that Nuuly now appears to be leading the industry with an opportunity to continue to see significant growth. Based on our current plans, we believe Nuuly could deliver a healthy double-digit revenue and profit growth in the second quarter.' Nuuly's revenue surge comes as the apparel rental site sets its sights on a high sales goal. After turning a profit during its last fiscal year, Nuuly President Dave Hayne said the company aims to reach $500 million in sales this year, a milestone he called 'an achievable goal.' Urban Outfitters also recently expanded the brand's fulfillment capacity. Last year, the company opened a 600,000-square-foot fulfillment center for Nuuly in Raymore, Missouri. The facility includes full laundering and clothing alteration capabilities and was expected to provide Nuuly with the capacity to triple its active subscriber base. Competitor Rent the Runway recently reported that Q1 revenue fell 7.2% year over year to $69.6 million. Its average active subscribers dipped 2% from the year-ago quarter to 135,896. Nuuly was launched in 2019 and offers 25,000 styles from over 500 brands and currently has around 380,000 subscribers. Recommended Reading SKU'd: Balenciaga is ready to dress you for the apocalypse Sign in to access your portfolio
