The Future. Urban Outfitters Inc.’s clothing rental program, Nuuly, is racking up revenue and increasing subscribers so quickly that the company believes it could be its fourth brand to become a billion-dollar business. While researchers are still wishy-washy on the overall sustainability of clothing rental compared to traditional ownership, renting clothes that would typically only be worn a few times for special occasions could keep millions of pieces out of landfills and ultimately reduce greenhouse gas emissions by up to 40%.
Urban Outfitters believes its rental program gives it plenty of room for growth.
- Founded in 2019, female-focused clothing rental brand Nuuly already has 150,000 subscribers — more than its competitor Rent the Runway.
- Its revenue skyrocketed 170% in 2022 to $130 million — only 5% of Urban Outfitters’ annual revenue.
- But that number is big enough for the company to think they have a billion-dollar brand in the making that could serve up to 600,000 subscribers.
Nuuly costs $88/month to rent six items. Clothes are available from the typical Urban Outfitters brands like Urban Outfitters, Anthropologie, and Free People, but also nearly 400 other brands, including rivals like Madewell. (The more, the merrier.)
With retail stocks (including that of Urban Outfitters) taking a hit in the past five years, brands are looking to rentals as the new hot thing in fashion (though some attempts have already failed). The practice has already won over 20 and 30-something consumers who are more price and eco-conscious… but still want to feel like their wardrobe is evolving.
Market intelligence firm GlobalData posits that the rental market is currently stitched up at about $5 billion, with the potential to hit $10 billion by 2026.