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Urban Outfitters is Entering the Clothing Rental Business

Urban Outfitters Inc. is joining the apparel rental movement.

The Philadelphia-based retailer, which owns the young-adult apparel chain of the same name, along with the Anthropologie and Free People brands, announced Tuesday the launch of a new women’s subscription service, one that it’s billing as a “new way to experience clothing.”

Rolling out this summer, Nuuly will offer a “robust offering” of Urban Outfitter brands, vintage items and third-party labels such as Anna Sui, Gal Meets Glam, Levi Strauss and Reebok through a custom-built digital platform. For $88 per month, Nuuly members will be able to choose a box of six items to wear as often as they like over the next 30 days. Should they fall in love with a garment, they’ll be able to purchase it for keeps. Otherwise, they can return everything in exchange for a fresh selection the following month.

“Since our founding in 1970, our company philosophy has been to give our customers the creative, compelling shopping experience they desire,” Richard A. Hayne, CEO and chairman of Urban Outfitters Inc., said in a statement. “Nuuly is the next step in that mission, and with it, we set out to be the subscription fashion leader by offering an unmatched curation of aspirational brands, coupled with extraordinary value.”

While rental comprises only 0.3 percent of all clothing spend, according to market research firm GlobalData, it’s growing by more than 20 percent annually, with a projected value of more than $2.5 billion by 2023.

Starting off with more than 1,000 styles, with a hundred or more added each week, Nuuly will feature everything “from premium denim and everyday dresses to seasonal outerwear and coveted vintage pieces” in sizes ranging from 00 to 26.

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Urban Outfitters Inc. is entering the rental landscape with “many strategic advantages,” according to David Hayne, chief digital officer at Urban Outfitters Inc. and president of Nuuly.

In addition to a dedicated team of engineers, product managers and data scientists who will be developing the technology driving the user experience, Nuuly will operate a warehouse and fulfillment center with state-of-the-art laundry equipment outside Philadelphia. The company has also invested in dedicated marketing, merchandising and creative teams to “curate an aspirational lifestyle experience” for its customers.

“We bring our distinctive brands and their proprietary assortments, millions of existing customer relationships with rich preference histories, long-standing brand partnerships, a broad point-of-sale distribution network, as well as deep, operational know-how and investable capital,” Hayne added. “When paired with our proven ability to develop creative lifestyle brands, we believe Nuuly is uniquely positioned to deliver the dynamic subscription rental experience the modern customer desire.”