2022 has been a year of ups and downs for fashion rentals. Dedicated platforms, brands, retailers and even media groups offering rentals are riding the wave of post-pandemic parties, weddings and nightlife, which will be worth more than $2 billion by 2025. It is profitable for the forecasted sector.
Throughout the year, new rental offerings were introduced from brands at various price points. H&M, Marks & Spencer and John Lewis have launched rental services on the UK’s main streets. And as a luxury item on the market, MatchesFashion Rental launched his November. In the US, Modern Luxury Media, the group behind publications such as Jezebel and Hamptons Magazine, will launch his ModLuxRent in October 2022. The style of the rental platform is curated by the magazine’s editors. Selfridges, which entered the rental market in May 2021, recently revealed that in the year since its launch, he has rented 2,000 units.
However, not all fashion rental services have been successful. UK rental platform Onloan and US-based Seasons both shut down in February 2022, annihilating Ann Taylor’s Infinite Style and Banana Republic’s Style Passport rental services. After his October 2021 IPO fell through, Rent the Runway (RTR) laid off his 24% of the company’s workforce in 2022. This is part of a restructuring plan aimed at helping the business achieve profitability. RTR’s share price was down nearly 90% before starting to rise in December following strong third-quarter sales.
Overall, the fashion industry is experiencing turmoil. Looking into 2023, continued economic uncertainty, inflation, the climate crisis and low consumer confidence will pose threats. According to Business of Fashion’s 2023 State of Fashion report, more than half of fashion executives surveyed expect the industry to deteriorate in the next year. While this should concern traditional brands and retailers, rental platforms can be a strength.
Eshita Kabra-Davies, founder of UK peer-to-peer fashion rental platform By Rotation, said: Use when they dress up. But in the long run, the recession will make people choose to rent more commonly. ”
Kabra-Davies said By Rotation, which leases brands like 16arlington, Prada, The Vampire’s Wife and Ganni, grew its customer base ninefold last year, reaching 300,000 registered users.
Part of the success of this platform lies in its community. According to Kabra-Davies, some ‘star rotators’ earn £20,000 ($24,105) a year from leasing clothes. “Women are befriending each other, saving up to try to conceive, or quitting their jobs because they’re struggling with childcare,” she said of the renter’s success stories.
Expansion into resale was also a popular move for rental platforms. This is what ByRotation, Hurr Collective and Rotaro all did in 2022. Kabra-Davies said. “The items people buy for resale are very different from the items they rent. [shows] of [offerings] Meet your different needs. ”
Compared to bright and trendy parties that are commonly rented, resale items that are purchased tend to be timeless investments that allow users to ‘try before you buy’.
Kabra-Davies predicts that it will be a more streamlined business that will weather a recession in 2023, reflecting an increasingly saturated rental market. A team of just 7 employees. “Many other startups in this space have more than 30 employees of hers and an even tighter funding environment,” she said. “Having a lean business model that focuses on one thing and doesn’t spend too much on it will be key to survival.” In fact, both Seasons and Onloan are set to close in 2022. They cited warehousing and logistics issues as the main reason.
Avid rental companies see it as the future of clothing consumption, while others are experimenting with the format to meet ambitious sustainability commitments. It’s part of a larger circular strategy that includes skincare and beauty replenishment, and clothing repair.
Clothing rental will be a particularly attractive service in 2023 as it solves consumers’ shopping woes at a fraction of the cost. At Rent the Runway, you can rent his $1,000 JW Anderson bag for his $47 a day. A 2022 study found that 89% of his users reported buying less clothing since subscribing. This shows that Rent Her platform has the ability to change the consumption habits of its users.
According to the State of Fashion report, 74% of U.S. shoppers will trade for cheaper options when shopping in 2022, arguably fast fashion like Shein, which was valued at $100 billion this year. It is spurring the rapid growth of giants.
Converting fast fashion shoppers into renters requires educating them about the potential environmental benefits of renting rather than buying cheap clothing.In 2021, Finnish academics in Environmental Research Letters Released the report, it says that rental has a greater impact on global warming than other sustainable options such as resale, long-term use and recycling. This report focuses on emissions from transportation and dry cleaning, which are the bane of fashion rental companies. The fact remains that very little data-backed independent research has been done to back up the sustainability claims made by many rental platforms.
The broader rental market is well positioned for 2023, if Rent the Runway’s promising third-quarter revenue growth does its job. – An effective, community-driven and ethical shopping alternative. In addition, rental companies with lean operations may continue to attract investment despite the increasingly tight funding environment.