2022 was a year of ups and downs for fashion. Dedicated platforms, brands, retailers and even rental media groups are riding the wave of parties, weddings and nights out after the pandemic as they cash in on the sector, which is predicted to be worth more than $2 billion by 2025.
Throughout the year, new rental offerings were introduced across the price spectrum of brands. On the UK high street, H&M, Marks & Spencer and John Lewis have launched rental offers. And at the luxury end of the market, MatchesFashion Rental launched in November. In the US, the group behind publications including Modern Luxury Media, Jezebel and Hamptons Magazine launched ModLuxRent in October 2022. Rental forum styles are edited by the magazine’s editors. Selfridges, which will join the rental market in May 2021, recently shared that it has rented 2,000 units a year since its launch.
But fashion rental services have not all been success stories. UK rental platform Onloan and US-based Seasons are both shutting down in February 2022, with both Ann Taylor’s Infinite Style and Banana Republic’s Style Passport rental services gone. After a disappointing IPO in October 2021, Rent the Highway (RTR) will lay off 24 percent of its workforce in 2022 as part of a restructuring plan intended to help the business return to profitability. RTR shares fell 90% before things started looking up in December following strong third-quarter sales.
The fashion industry as a whole is experiencing turmoil. In the year Looking ahead to 2023, continued economic instability, inflation, climate crisis and low consumer confidence are likely to be threats. According to the Business of Fashion 2023 State of Fashion report, more than half of fashion executives surveyed expect the industry to worsen in the coming year. While this applies to traditional brands and retailers, rental platforms may be on the rise.
“Consumer sentiment is weak at the moment,” says Ishita Kabra-Davies, co-founder of peer-to-peer fashion rental platform in the UK. To spend while wearing. But a prolonged recession makes renting what people typically prefer.
Cabra-Davis B Rotation has grown its client base ninefold to 300,000 registered users over the past year, leasing brands including 16arlington, Prada, The Vampire’s Wife and Ganni.
The platform’s success lies in part in its community. According to Cabra-Davies, some of the “star rotators” made 20,000 pounds ($24,105) a year renting out their clothes. “Women are becoming friends with each other, saving for maternity leave or quitting their jobs after struggling to afford childcare,” she says of Tenant’s success stories.
For rental platforms, the expansion into resale was also a popular move – in 2022 ByRotation, Hurr Collective and Rotaro all did. “We’ve had a lot of tenants say they love renting dresses, they want to buy them,” Cabra Davis said. “The things people buy at resale are very different from the things they rent. [shows] of [offerings] meeting different needs.”
Compared to a bright, trendy party look that’s typically rented, resale items are timeless investments that consumers can “try before they buy,” she says.
Reflecting on the rising rental market, Cabra-Davis predicts that businesses will be more resilient to recession in 2023. Only a crew of seven. “Other startups in this space have more than 30 employees, and it’s a tough fundraising environment,” she said. “Having a lean business model where you focus on one thing, while not spending too much, will be the key to survival.” Indeed, Seasons and Onloan both cited warehousing and logistics issues as key reasons for closing in 2022.
While dedicated rental companies see it as the future of clothing consumption, others are experimenting with the format to meet their larger sustainability commitments. For Selfridges, leasing is part of a larger circular strategy that includes resale, skin care and beauty replenishment, and clothing repair.
Renting clothing can satisfy consumers’ shopping itch at a fraction of the cost, making it an especially attractive offering in 2023. A runway renter can rent a $1,000 JW Anderson bag for $47 a day. In the year In a 2022 survey, the company reported that 89% of users reported purchasing a few items of clothing since signing up, indicating that rental platforms have the potential to change consumer spending habits.
The State of Fashion report found that by 2022, 74 percent of U.S. consumers will shop for low-cost options, an estimated $100 billion this year, fueling the rapid growth of fast-fashion brands like Shein.
Converting fast fashion consumers to renters requires education about the potential environmental benefits of renting and buying cheap clothes. In the year In 2021, Finnish academics published an environmental research letter stating that recycling has a greater global warming impact than other sustainable options such as resale, extended use and recycling. The report focuses on transportation and dry cleaning emissions, which are pain points for fashion rental companies. The reality is that very little, independent research has been done to back up the sustainability claims that many rental platforms make.
If third-quarter earnings improvement is what fuels the quarter, the broader rental market is well positioned for 2023. Consumers understand the concept more than ever and allow rental companies to market themselves as expendable. – An efficient, community-driven and ethical alternative to marketing. Additionally, despite a tight funding landscape, rental companies with dense operations may continue to attract investment.