Urban Outfitters Inc., is launching a clothing rental service this summer, targeting price-conscious and fashion-forward customers who want an ever-changing wardrobe.
The new service, called Nuuly, will be an $88 subscription for one box of six items, the company said in a news release. Shoppers will be able to select from more than 1,000 styles from a variety of categories such as denim, dresses, outerwear, and vintage items.
With its new offering, Philadelphia-based Urban Outfitters joins such similar services as Rent the Runway, Le Tote, and American Eagle’s Style Drop, trying to capitalize on a fast-growing clothing rental market — estimated to grow from almost $1.3 billion now to more than $2.5 billion by 2023, according to market research firm GlobalData.
Subscribers will be able to wear the clothes as many times as they want. Returned clothes would be dry-cleaned before being rented out to the next customer.
Besides Urban Outfitters, subscribers will be able to choose from such affiliated brands as Free People and Anthropologie, as well as other brands such as Reebok, Fila, Champion, Universal Standard, Naadam, LoveShackFancy, Chufy, Gal Meets Glam, Ronny Kobo, and Anna Sui.
Sizes will range from 00 to 26, and there will be petite and plus-sized apparel options. The company plans to add more than 100 styles a week and hopes to triple the amount of options by the end of the year. If subscribers love an item in the box, they can choose to purchase it.
The company estimates the retail value of one box to be more than $800, David Hayne, the company’s chief digital officer and president of Nuuly, said on a Tuesday earnings call with analysts.
“Nuuly seeks to further these shifting behaviors by giving subscribers access to a wide assortment of current fashion at a substantially lower cost per wear than retail," Hayne said on the call, "solving the paradox of a millennials’ quest for constant fashion newness, alongside the desire for a more sustainable lifestyle.”
Nuuly hopes to have about 50,000 subscribers within its first year, meaning it could exceed more than $50 million in annual revenue, Hayne said on the call.
On Tuesday, Urban Outfitters reported its first-quarter earnings. Sales rose 1 percent to $864 million, for the three months ending April 30. Comparable retail sales at Free People rose 2 percent, and 1 percent at Anthropologie. Urban Outfitters’ comparable retail sales were flat.
The company’s stock is down about 25 percent this year to $24.34 at Wednesday’s close.