Fashion rental services are heading into 2024 with the goal of bringing more budget-cautious customers into the fold.
For players in the space, performance is mixed. Earlier this month, Rent the Runway that its third-quarter revenue had dropped 6.3% to $72.5 million. Its subscribers also declined for the first time since the company went public in 2021, per Telsey Advisory Group. Urban Outfitter Inc.’s Nuuly, meanwhile, in the third quarter and enjoyed a 68% year-over-year increase in subscribers for the three months ending Oct. 31, 2023. Back in April, tuxedo rental platform The Black Tux that revenue was 35% higher than pre-pandemic levels.
Some of this disparity stems from rental companies’ business models. For example, , Rent the Runway’s co-founder and CEO Jennifer Hyman pointed to an “inventory depth issue” as one reason for lack of growth. Nuuly, on the other hand, has the benefit of offering items from its sister brands like Anthropologie, Urban Outfitters and Free People, which makes controlling inventory easier, Nora Kleinewillinghoefer, partner at Kearney, told Modern Retail.
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