Clothing brand Urban Outfitters has introduced a new clothing rental program that could help prevent millions of articles of clothing from going to waste.
- Urban Outfitters’ new program called Nuuly is rapidly growing as more subscribers sign up to rent out clothing.
- Research is still unclear whether clothing rental significantly affects the environment, but at a minimum, it repurposes clothing that would otherwise go to waste.
- The new program is growing so rapidly that Urban Outfitters thinks Nuuly could become its fourth brand to reach billion-dollar business status.
Why it’s news
For shoppers who only need an outfit for a special occasion, rental clothing can present a more sustainable and economical option than purchasing something brand new. Nuuly has already proven to be a profitable brand under Urban Outfitters.
The clothing brand primarily caters to female customers. It opened in 2019 and already has 150,000 subscribers—more than competitors like Rent the Runway, Future Party reports.
In 2022, the company saw a 170% revenue increase. Though Nuuly’s $130-million revenue is only 5% of Urban Outfitters’ annual revenue, the rapid growth is still eye-catching enough that Urban Outfitters is betting that Nuuly could become an extremely profitable brand.
For $88 a month, Nuuly subscribers can rent up to six items. These clothes range from Urban Outfitters brands like Anthropologie and Free People to nearly 400 brands like Madewell.
In the last several years, retail stocks have declined. Companies are looking for other ways to boost their value, and some consider rentals to be the next big thing in fashion. Younger customers are already won over by the potential to practice more sustainability in their purchases.
The rental market is currently around $5 billion, but it has the potential to reach $10 billion by 2026, according to market intelligence firm GlobalData.