Ann Taylor launches subscription rental service
Ann Taylor, the struggling brand now owned by Ascena Retail Group, has launched a $95-per-month apparel rental program in the U.S. with free unlimited shipping both ways, according to the brand's website.
Items, which don't include shoes or accessories, are available in women's regular and petite sizes 00-14 and XS-XL, the company said. Three boxes, containing three items each from an accumulated online "closet," are sent out each month. Subscribers must have chosen at least eight items for their Ann Taylor "closet" in order to keep boxes coming, although having 20 items online is advised. An online return notification allows the next box to ship.
Customers who want to keep any items can buy them at a discount, though by definition they are likely to be pre-worn by others, the company also said. Any item can be kept indefinitely. Laundry is taken care of by Ann Taylor, though those keeping items for a while can launder the clothes themselves as long as they're kept in pristine condition.
This move is an answer to a new rental level introduced last month by Rent the Runway, a cheaper $89 monthly service aimed more at the kind of clothing sold by Ann Taylor than the haute couture special occasion items Rent the Runway has so far specialized in.
It's also predicated on the revolutionary premise from that disruptive apparel service — that people will begin to think of their wardrobes as existing "in the cloud," making it virtually infinite — a step beyond the original concept of renting special occasion dresses and shoes (the Cinderella approach) to renting casual wear and office wear on a routine basis.
These efforts represent a direct challenge to fast fashion, which relies on ownership on the cheap and a closet's high turnover rate. Another selling point, related to that turnover, is the notion that renting clothes is kinder to the planet, although the back-and-forth shipping and constant dry cleaning (owned clothes are likely laundered less often) may make that difficult to defend to any great extent.
And it's the latest installment in subscription retail, which in recent weeks has seen more apparel brands join that experiment. Both Old Navy and its sibling Gap brand introduced children's apparel subscriptions, along with Under Armour, which last month debuted a service it's calling ArmourBox. It's a model meant to gain regular orders and sticky customers that, despite its growth in recent years, remains largely untested, particularly in apparel sales, which involve especially complex logistics. In fact, most apparel subscription boxes aren't really subscriptions at all, but more of a membership model with plenty of opportunities to adjust, cancel or time the arrival and content of the boxes.
When it comes to fashion, the logistics are complicated by a host of variables, like style and fit, not nearly as consistent as the replenishment of known quantities of consumer product goods. That, in turn, could lead to more returned products. There are apparel players successfully operating in the space, most prominently Stitch Fix, which has been in business for just five years, and which last month filed for an initial public offering and was also recently named one of the top startups of the year by LinkedIn. While the IPO was widely anticipated, Stitch Fix's prospects may be undermined by Amazon's own version of the subscription service, dubbed Prime Wardrobe, currently in beta.
Still, the long-term financial viability of the model remains largely unproven. Nordstrom's Trunk Club, for example, began as a concierge service for men and now also styles women. But while it gets high marks from users, Nordstrom wrote down $197 million of that business last year. Three years ago, Nordstrom acquired the service, started by Bonobos co-founder Brian Spaly (who left late last year as CEO), but it is not yet profitable and the nearly $200 million write-down represents more than half of the $350 million Nordstrom paid for it.
To stem those losses, Nordstrom last year instituted a $25 at-home try-on fee (which can be credited to a purchase) and shortened the return window. Stitch Fix similarly has a $20 try-on fee that can be used toward a purchase and generally offers prices that are lower than Trunk Club thanks to, in part, a less costly styling approach based on inputs from a questionnaire, rather than Trunk Club's direct human interaction.
Ann Taylor's "Intimate Style" doesn't include such styling services; customers browse and choose items themselves, which could help keep costs down. The brand has struggled in recent years, although parent company Asena posted surprising fourth quarter sales and profits in September.
Ascena has worked to become leaner and more focused: The restructuring initiative it launched last year, "Change for Growth," looks to focus company resources on key customer segments, improve its time to market, reduce working capital and boost the company's omnichannel capabilities. The efforts came amid sales declines across many of its brands and warnings that traffic at its stores could continue to slow.
- Ann Taylor Infinite Style - How It Works
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