Clothing rental companies are bouncing back after the pandemic, but is renting clothing a good idea?
The clothing rental industry was growing prior to the pandemic with companies like Nuuly, Armoire and Gwynnie Bee joining market leader Rent the Runway in the fashion rental space. In 2019, the global online clothing rental market was estimated to be $1,123.5M and was expected to attain a market value of $2,817.8 Million by the end of 2027.
Then the pandemic hit, and many employees transitioned to working from home. With stay-at-home mandates and restrictions on gatherings, there wasn’t as much of a need to rent designer clothing. While Rent the Runway was able to keep their warehouses open, the company furloughed roughly 35 percent of its corporate employees in March 2020. Le Tote, another clothing rental company, announced layoffs of most of its employees as well.
Today, as the country is returning to some sense of normalcy, fashion rental is making a comeback. Rent the Runway’s chief executive, Jennifer Hyman, told the New York Times that users have been returning to the service in droves. The company has experienced a 92% increase in active subscribers since their pandemic low last May. According to Hyman, the company is on track to outpace 2019 levels by the end of the year.
What makes clothing rental so popular? Is it a good option for someone on a budget? Learn more about clothing rental companies and if borrowing clothing is right for you.
What is clothing rental?
Companies like Le Tote, including some large retailers, have created a way for consumers on a budget to have access to more clothing options or designer labels. You can borrow and return clothing for a monthly subscription or annual fee, rather than purchasing clothing items individually. The company benefits because they make a steady stream of revenue from your subscription payments. The consumer benefits because they are able to afford to wear designer labels or expand their wardrobe when they normally wouldn’t be able to.
How does renting clothing work?
The process works differently depending on the company. Rent the Runway specializes in designer brands. According to their website, “Become a member to access a forever-rotating closet of designer clothing, accessories and more. No commitments. Pause or cancel anytime.” Plan pricing is based on how many items the customer wants each month – 8, 12 or 16. Your membership also includes free shipping and returns, fit tools to help you find the right size, members-only sales, dry cleaning and rental coverage.
At Le Tote, you browse styles and choose the items you want. They will send your tote within two to three days. Return what you don’t want and buy the items you like for up to 50% off the retail price. Monthly memberships start at $59 a month.
Is borrowing clothing a good financial decision?
Purchasing previously worn clothing from a clothing rental company is less expensive than purchasing it at the retail price. If you add up the cost of the items and accessories you receive in your rental, the overall cost is less than if you were to purchase each item individually.
Whether or not it is a good financial decision to rent clothing depends on your circumstances. If you currently spend a lot of money on clothing, you could save by renting outfits instead. That is if the monthly subscription fee is less than what you typically spend on clothing each month. An even better way to save would be to reduce what you spend on clothing by purchasing staple pieces that can be mixed and matched to create new outfits.