Urban Outfitters Announce The Launch Of A New Rental Service
But, how do we choose just 6 items a month?
Yesterday Urban Outfitters announced first-quarter sales of a record high, however that was far from all the news they shared. The brand also took the opportunity to announce their plans to roll out a new rental program, through which customers are able to lend up to six clothing items per month for a fee of $88.
The initiative, entitled Nuuly, follows in the footsteps of similar successful rental models which have been adopted by popular brands such as Rent the Runway.
Nuuly is set to operate as a separate brand from the beloved UO and will be led by David Hayne, Urban Outfitter’s chief digital officer and the son of the company’s co-founder and CEO.
Items that will be made available to rent will include the vintage products synonymous with Urban Outfitters, as well as garments from a selection of third-party labels including athleisure favorites, Reebok and Fila.
Those using the services will select their chosen items which will then be mailed to them in a reusable bag with a pre-paid postage label, to make the returns process as seamless as possible. Once returned, items will be laundered before being sent to another customer.
But, with this new rental service available, will customers continue to shop instore? Hayne is confident that the answer is yes. The new head of Nuuly told The Wall Street Journal that “we certainly don’t think the customers are just going to stop purchasing. Purchases make sense for things you know you’re going to use often; rental makes sense for things you would like to try.”
Hayne went on to explain that current projections estimate the new program to generate $50 million in revenue in the first year alone. However, with the company’s first-quarter net income exceeding analysts’ projections, who knows how bright the future could be for Nuuly.
The launch of a rental service seems a sensible move for the brand, in a climate which sees shoppers becoming ever-more conscious of their consumption. However, the birth of Nuuly also appears at a crucial time for the brand as, whilst Urban Outfitters’ sales have soared during the previous quarter, the company’s stock failed to match this performance. The brand’s shares have dropped by 19% since the start of the year.
So, while the incentive behind the new service remains unclear. The real question is, how are we going to pick just six items a month?!
Image source: Fortune