Lydia Patel made a big decision two years ago: she stopped buying clothes.
"In my busy life nowadays — I realized especially after Covid — I go to work in scrubs," explains the Minnesota pharmacist, YouTube creator and mom of three. "I don't dress up anymore for work, so I really don't need a whole lot of new clothes."
After seeing the outfits she rarely wore to kids' birthday parties and daytime events languishing in her closet, she thought, why not rent her wardrobe instead?
While Rent the Runway set the tone for the clothing rental industry when it launched 16 years ago — offering designer gowns for a night — it and trendy competitors such as Nuuly now let consumers borrow a set number of items, including dresses, jeans and even winter coats, for a monthly price.
The concept was intriguing to Patel. "I kind of looked into rental as an option because I don't really want to hang on to pieces forever," she said. "By the time I have something else to go to, the trends will have changed. My tastes might have changed."
Over two years later, Patel says, deciding to rent her clothes "has opened up access to more quality pieces that are unique and fit what I want to wear at the moment without breaking the bank."
And she doesn't have to worry about storing or washing the items she borrows. At the end of the rental term, she returns the pieces to the companies and they handle the shipping and cleaning.
"I don't even know what you do with silk — and I don't want to," she says.
Patel is just one of more than a half a million women — this industry caters almost exclusively to women — who are using clothing rental platforms, according to some of the companies' public data.
The industry is worth $2.6 billion, and is projected to more than double in value by 2035, according to market research firm, Future Market Insights. Its growth is a signal that shoppers are looking for budget-friendly alternatives just as inflation and tariffs threaten to push clothing prices higher.
The price of new clothes is rising — and tariffs aren't helping
Apparel prices have risen 9% since February 2020, according to the Bureau of Labor Statistics. That's far less than overall inflation, which has increased nearly 26% over the same time period. Still, experts believe, as tariffs settle in and make their way through the supply chain and into stores, consumers will start to see price tags change.
This winter will likely see some strong increases in apparel sales. They'll be "driven by inflation and tariff-related price increases as brands and retailers have to pay more to import clothing," says Sky Canaves, an analyst at the market research firm eMarketer. For some brands, this means passing on costs to consumers will be "unavoidable," she says. Barely any garments are made in the U.S. today.
If you're in the market for a new coat this winter, you may already be feeling the pinch. Jackets and outerwear prices rose 24% on average over the past year, according to an AlixPartners study.
The cost increases have sent some shoppers exploring the rental and secondhand markets.
"Services that can offer consumers the opportunity to keep their wardrobes fresh on an ongoing basis are really benefiting," says Canaves.
It's an opportunity not lost on Patel. She estimates that if she purchased instead of rented her clothes, it would cost her thousands of dollars. Instead, using rental for just six months out of the year keeps her within the $500 she budgets annually for clothing.
"I put my subscription on pause most of the time," she says. She reactivates her membership before events or trips.
Nuuly President Dave Hayne says that's OK: "We know that subscribers aren't going to need us every month of the year, and that's fine."
He says the company has made it easy for customers to take a break and return when they need the service. And so far, Hayne says, subscribers have been coming back.
The rental industry can't escape tariffs
However, rental fashion platforms are not immune from the impact of tariffs, which are leading to shipment cancellations and production delays. Fewer items reaching U.S. shores means fewer options for shoppers, Canaves says.
Because rental platforms must keep their stock of styles constantly refreshed to meet customers' expectations, "they're exposed to many of the same cost pressures facing traditional retailers," she explains.
It's harder for fashion rental companies to quickly pass on increased costs to consumers because their subscriptions are offered at set monthly prices. Hayne says Nuuly is taking multiple steps to manage the challenge of tariffs.
"[We're] thinking about where we're sourcing from and where brands are buying from, and how we split costs," he says.
Unlike other rental platforms, Nuuly is part of a large fashion company that also owns Anthropologie, Free People and Urban Outfitters. Hayne calls the relationship a "big plus" for Nuuly, allowing it to work closely with those brands on buying certain styles as well as purchasing apparel at cost.
Rent the Runway CEO Jennifer Hyman says while her company has had "bigger fish to fry" than tariffs — after losing over half its subscriber base during the pandemic — it pays clothing brands based on the performance of its inventory, instead of buying the items outright. "So we've been less affected than most," she says.
Decking the halls in a rental
The holidays are the busiest time for fashion rental as people shop for that special look for office parties, family gatherings and New Year's Eve that they can return once the party season ends. But the added demand strains existing inventory challenges.
Both Nuuly and Rent the Runway have taken efforts to avoid running out of items.
"We heard from [our customers] that the biggest problem we had in our business was inventory availability," Hyman says. To address this, Rent the Runway committed to doubling the amount of styles available to its subscribers this year.
But Hayne admits it's hard to get those numbers right. "One of the most important things for this business to be successful is trying to balance inventory levels with subscriber levels," he said.
Both Hyman and Hayne's advice to consumers looking to rent for the holidays: rent as soon as you can.
This busy holiday season Patel says she'll be wearing rented clothes. She hasn't decided whether it will be a fun "ugly sweater" or a velvety dress. Regardless, she plans to return the items in January so she doesn't have to do the laundry.
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