Dive Brief:
- Subscribers to the Nuuly clothing rental service are now able to return their monthly rental totes directly to Urban Outfitters stores anywhere in the U.S., according to a press release.
- Created as a seamless way to return clothing rentals and bring customers into its stores, Urban Outfitters is specifically targeting a Gen Z consumer, per the release.
- The new in-store program allows Nuuly customers to receive faster processing, instant updates, 15% discount offers through Dec. 24 and, in a few select locations, a gift with return.
Dive Insight:
Recent reports show Nuuly to be dominating the apparel rental market with more than double the number of active subscribers as Rent the Runway, its next-largest U.S. competitor.
The new return program aims to give consumers a seamless shopping journey while allowing for in-store shopping.
"Our stores have always been more than just places to shop, they're spaces for discovery, connection, and convenience," Shea Jensen, Urban Outfitters president, said in a statement. "By bringing Nuuly returns into select UO locations, we're making it easier than ever for customers to manage their wardrobes and discover what's next. It's another step in blending our digital and in-store experiences to meet our community where they are."
Nuuly, which first launched in 2019 and offers customers 25,000 styles from over 500 clothing brands, has about 380,000 subscribers. The service is able to obtain inventory at cost from its sister companies Anthropologie, Free People and Urban Outfitters. Nuuly encompasses both Nuuly Thrift, which Urban Outfitters launched in 2021 as a resale marketplace, and Nuuly Rents.
Nuuly recorded its first profitable year in 2024 with an operating income of $13 million and full-year sales rising over 60% to $378 million. The brand is projecting sales of $500 million in 2025. In Nuuly’s latest quarter sales were $139 million, up 53% year over year.
"We're always looking for fresh ways to engage our Gen Z consumers and streamline the shopping experience,” David Hayne, president of Nuuly, said in a statement. “This partnership is a strong example of what's possible when we come together."
Nuuly’s main competitor, Rent the Runway, finds itself in the midst of a turnaround and reported Q2 revenue of $80.9 million, up 2.5% year over year. The company’s net loss widened to $26.4 million from a loss of $15.6 million in the year-ago quarter. The company reported an increase in average active subscribers to 146,765, up 6.8% year over year.
