The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Agenda-setting intelligence, analysis and advice for the global fashion community.
SAN FRANCISCO, United States — Katie Moynihan Gray, a mother of three who lives in Indianapolis, has a Google doc of tips that she shares with pregnant friends. At the top of the list, before what diaper pail she recommends or what baby carrier she liked best, is this suggestion: rent maternity clothing from Le Tote.
The 37-year-old was pregnant with her third child when she discovered the San Francisco-based clothing rental service, which delivers a “tote” of apparel and accessories for a monthly subscription fee.
“I was so sick and tired of my maternity clothes,” she said. Moynihan Gray used it primarily for workwear, took a break from the service after having a baby and then started using it again when she returned to her job in life-science technology commercialization at Indiana University. “I was not yet the size I wanted to be and I did not want to buy a lot of clothes,” Moynihan Gray said.
I was not yet the size I wanted to be and I did not want to buy a lot of clothes.
Renting clothing is no longer solely the purview of millennials looking for a dress to wear to a wedding. Today, an array of consumers see these services as a wardrobe hack to outfit their everyday lives. Clothing rental is especially useful, they say, for life’s transitions or for sudden, even temporary wardrobe changes, like a job change, a move or a vacation abroad. Increasingly rental companies are offering options tailored to specific segments of the apparel market, like plus-size, maternity and kids clothing.
At Le Tote, maternity wear makes up 12 percent of rentals. Rent the Runway, the dominant player in the space, offers maternity clothing, recently launched kids rental and has plans in the works to offer home goods. Newer companies include By:Fashionaholic, a Chicago-based firm that rents very high-end designer pieces (think: Chanel bags and Gucci dresses) and Tulerie, the New York-startup that aims to be the AirBnb of clothing rental, facilitating fashion-savvy folks to rent pieces from one another.
The proliferation of rental options speaks to the growth potential. Rather than challenge the dominance of Rent the Runway, many newcomers see a chance to offer a differentiated assortment and reach a new customer.
It helps that in recent years there has been a significant shift in consumer mindset around the practice, as the stigma of not owning something has been replaced by a pride in the sustainability and sensibility of renting it.
Maybe they can't spend $6,000 on a Valentino dress, but they can spend $600 to rent it.
Avid users of these platforms say it has dramatically changed their shopping habits, helping them cut down on impulse purchasing or buying into trends. But it has also upped their personal style by allowing them to experiment with fashion and try new or more expensive brands. Regular renters don’t claim a real cost savings by renting rather than owning, saying the subscription fees are likely the same or more than what they might spend themselves in an average month. But there’s a feeling that it’s a smart, and more fun, allocation of resources.
Much like online shopping, renting gives shoppers access to stores beyond what’s available locally. Katy Jones, a 29-year-old who works in healthcare marketing in Des Moines, Iowa, finds the lack of plus-size clothing in her nearby stores frustrating, as well as the absence of a major upscale department store.
When Jones rented through Gwynnie Bee, a clothing rental company that offers sizes 0 to 32, she expanded her wardrobe with more fashion-forward pieces, like a draped cardigan with pieces of faux leather on the arms. “I got so many compliments on it,” she says. Jones remembered a blue sequin dress, which she rented through Rent the Runway, with a similar fondness: “It was not something I would ever buy for myself.”
Although special occasion introduced many women to renting, By:Fashionaholic spotted remaining white space. The Chicago startup, which launched in May 2018, rents high-end designer clothing and accessories, everything one might need to attend a black tie gala or a charity luncheon. It buys its inventory from retail boutiques and pays retail prices. About half of its customers are headed to a special event. “They need something extraordinary,” Founder Janet Mandell said. “Maybe they can’t spend $6,000 on a Valentino dress, but they can spend $600 to rent it.”
I can dress for the job I want and the person I want to be.
The market game changer has been a shift from occasional rentals to total wardrobe replacement. Take Rachel Pustejovsky. She lives near Wrigley Field in Chicago, Illinois but says her closet is five miles south at the Rent the Runway boutique downtown. The 25-year-old was an early adopter of the company’s unlimited service, which allows users to have four pieces at a time for a monthly subscription fee of $159.
Pustejovsky cycles through most of her “slots” quickly, renting as many as 30 pieces a month. Once she picked up a yellow Kate Spade bag at the Rent the Runway store, carried it to brunch, and returned it immediately after. “I can dress for the job I want and the person I want to be,” she said.
Beyond satisfying a fashion craving, rental customers say it’s a solution to their problems. Lynne Jansons left New York last fall after 14 years to move for a two-year stint in St. Petersburg, Fla. Rent the Runway helped ease the transition to her new home, while offering flexibility for trips back to New York.
“When I'm down here it’s all sundresses and beach cover-ups,” said Jansons, who works in marketing consulting. “Whereas when I’m in the city it’s dark colours and heavier fabrics.” What’s more, renting has completely changed the 35-year-old’s purchasing mindset. “Going to the mall and going shopping is kind of torturous,” she said. “How do I commit to an item of clothing forever?” Her purchases are primarily basics, like jeans, and workout clothes at Lululemon.
Kids are constantly growing and renting is really a perfect and sustainable solution for getting kids dressed.
Now companies are hoping to better serve existing customers, and lure new ones, with an expanded assortment. Rent the Runway, where the average subscriber is 33 years old, will begin a home goods partnership with West Elm this summer. Last month, it launched kids clothing, allowing one-off rentals as well as existing unlimited customers to use one or all of their “slots” at any given time on it. (The company also added the possibility extra slots for an additional $39 a piece, in case you don’t want to share.)
“Kids are constantly growing and renting is really a perfect and sustainable solution for getting kids dressed,” said Maureen Sullivan, the company’s chief operating officer. When asked if these tiny fashionistas might be hard on the clothing, Sullivan laughs. In terms of wear-and-tear, they’ve already seen it all. “The most valuable employees in our company are our seamstresses and our stain removers,” said Sullivan.
The kid's collection grew out of Rent the Runway’s maternity offering. In addition to a selection of maternity-specific styles, the site offers up non-maternity clothing that could work during pregnancy, and even offers photos of how a style might accommodate a bump.
Indeed, style hang-ups or potential dressing pain points like pregnancy, when options are limited, needs are temporary and sizing is tricky, are prime times for a shopper to turn to clothing rental.
The hardest part about it is when I sit down at the end of the month, I don't have anything physical to account for.
But niche markets are, by definition, a smaller slice of the population and pose unique challenges. Take pregnancy, where "the first part of month seven is not the same as the second half of month seven, or the beginning month eight," said Le Tote Co-Founder and Chief Executive Rakesh Tondon.
The idea for the company, which launched with workwear in 2014, came during Tondon’s wife’s second pregnancy. But Le Tote didn’t offer maternity until the fall of 2015 because it needed to help its algorithm, which takes the first pass on compiling a tote, learn the disproportionate sizing changes, Tondon said.
Today the average Le Tote customer is between the ages of 28 and 45; 85 percent are looking to add variety into the work wardrobe. The company is actively looking for new markets and hopes to launch plus size options, Tondon said.
Is renting rather than buying a fad or a new reality? Diana Chiavetta, a 27-year-old New Yorker who wears Rent the Runway pieces as many as five times a week, says it’s a satisfying confidence boost to wear new clothing all the time. But she isn’t sure how much longer she will keep it up. “The hardest part about it is when I sit down at the end of the month, I don’t have anything physical to account for,” she said. “I have beautiful photographs of beautiful dresses, but I don’t have anything.”
Tulerie hopes you won’t have to choose. The New York startup wants people to feel better about their purchases by offering the ability to rent said purchases — the company prefers the term “borrow” — directly from the item’s owner. Founders Merri Smith and Violet Gross see renting as a way to rationalize buying. “If I loan out this Gucci, I can buy my next one a lot more quickly,” Gross said. Tulerie reported a spike in usage during the recent spring break season. One woman took seven pieces, worth an estimated $10,000, Smith says, with her to Miami but spent under $1,000 to do so.
Before Tulerie allows you to join its platform, the founders require a FaceTime interview. They also strongly encourage the owners to participate in the borrowing, and vice versa, to add accountability to the equation. “The platform will only work as well as the user,” said Smith.