Luxury Fashion’s Rental Market Is Ready for Takeoff - Yahoo Finance

LONDON — Fashion rental businesses were one of lockdown’s most unlikely winners.

With events and socializing forced to a halt, early predictions were that the promising London start-ups pioneering the rental model in the U.K. and making strides pre-pandemic were probably not going to make it through.

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The reality was far from it: Interest in rentals peaked during lockdown, and despite some inevitably slow periods, these businesses had their best run yet in 2020, starting what has come to be known as the rental revolution.

Shoppers who aren’t fussed about ownership can access designer clothing at a fast fashion price point, or make a profit from renting their clothes out on a peer-to-peer platform. And the momentum is building: This year the goal for many rental start-ups is to achieve scale and further infiltrate the mainstream.

Cue the launch of white label services to assist brands and retailers in launching their own rental platforms. Rental pioneers including Hurr, On Loan and My Wardrobe HQ are all launching white label solutions this month, and everyone from major department stores, such as Selfridges, to contemporary brands, including Mother of Pearl, are jumping on board.

“I don’t want rental to be a conversation point in 2030; I want it to happen this year and I want there to be big change, because we can’t wait 10 years to solve fashion’s waste problem. The way in which we make change happen now is for Hurr to manage a white label solution,” said Hurr founder Victoria Prew, of her business’ new venture, dubbed Hurr Enterprise. Selfridges is her first client.

“The idea is that we’re powering the tech and the operations. It’s completely hands-off from the brand’s point of view, we do everything from using AI to power the smart-tagging of products to dry cleaning, using state-of-the-art cleaning facilities. Instead of having to invest millions of pounds into building their own rental operations after the pandemic, we’re telling retailers or brands ‘We’ve done it, and we can do it for you,'” added Prew.

Hurr has so far operated on its own platform, using both the peer-to-peer model and also stock from brands, including 65 buzzy names like Nanushka and Bash, which helps them to offer a greater variety and more depth of stock than a peer-to-peer only model.

In 2019, the company launched its first Selfridges concession and it was a hit. Ahead of Christmas, thousands of women used the service to rent festive pieces, according to Prew. It now has a permanent space within the department store and offers its own edit of designer brands to rent, from Cecilie Bahnsen to The Vampire’s Wife, or Danish up-and-comer Nynne.

Over the last year, the company had 2 million hits on its own site with people booking their rentals up to four months in advance, while still in lockdown, and driving what she said have been record revenues.

My Wardrobe HQ is another London-based re-commerce business debuting My Ventures, its own take on white label solutions across both rental and resale, to allow for bespoke solutions.

“For some brands, rental is attractive as it provides a more accessible price point to a new Millennial audience, as well as a sustainable solution and marketing narrative. For others, resale is a more appropriate solution, as they know there is recurring value in their brand stock,” said Natalia Pawlak, the business’ chief operating officer, pointing to the “integrated anti-fraud intelligence,” quick two-week deployment and blockchain authentication solutions.

“Blockchain is imperative for authenticity — we’re in a new age with all the buzz around NFT solutions from luxury brands such as Gucci. Gone are the days of certificates in boxes. Our blockchain solution solidifies item ownership and also provides the brands with automated recurring revenue which they haven’t seen before,” she added.

A mix of “luxury brands, independents and high street brands” are coming on board, according to Pawlak who also sees the service as “industry agnostic” and able to cater to adjacent industries, be it furniture or beauty.

British heritage brands like Moss Bross and L.K. Bennett are also road testing the service, by partnering with the U.S.-based rental technology platform CaaStle.

If the rental market is going to take the next step and go mass, brands and retailers will need to get more involved and put their own stock up for rent, according to Prew.

“It’s all part of getting all the biggest and best brands to rent through Hurr: Whether they do that directly through our platform or through a white label it’s up to them, my job is to make sure anyone who wants to be involved in the rental revolution can do so, and that it’s as easy and as economically and financially viable as possible,” said Prew. “The hybrid (model) is crucial for us to scale and build the next billion dollar rental business.”

Having Selfridges on board as a “hero client” means that now the quality of pieces available for rent will also be taken to a new level. For the first time, new-season pieces will be up for rent, as well as men’s wear and the kind of hyped items and capsule collections that have sold out in the primary market — a clear signal to the fashion consumer that “rental is cool” and “the next big thing.”

The collection Selfridges is putting up for rent, slated to launch May 7, includes current-season Rotate and Reformation dresses; Amiri shirts and jackets for men; and mini bags by labels-of-the-moment Amina Muaddi and Jacquemus.

“It’s the best-of-the-best current season stock, curated by Selfridges. This takes rental and the idea of sustainability away from a CSR box-ticking exercise to a revenue driver. Being circular is great but if you want to drive change with a white label proposition you’ve got to actually make money for these brands,” said Prew, who is also embarking on conversations with more Hurr brand partners which are performing well on the company’s own platform.

Contemporary labels, like Nanushka, Ganni or Rixo, have been more open to this new consumption model from the get-go, yet luxury players are now starting to see the opportunity too with discussions “coming forward five years,” according to Prew, who thinks there’s no reason for apprehension – only a “mass market opportunity” to unlock a younger consumer base of environmentally conscious Gen Z-ers and Millennials.

Rental is also more focused on trend or occasion pieces versus the brand classics customers prefer to invest in, so adopting the model won’t “cannibalize primary market sales” in any way.

To lure those younger shoppers into renting versus buying something on the high street and wearing it once, the platform is making sure to offer competitive price points across the board — prices for renting an Alessandra Rich gown can start at 147 pounds, while a Ganni dress can be loaned for as little as 30 pounds per day.

“I get out of bed every morning because I believe that Hurr can disrupt the fast fashion industry. Until you get the mass fast fashion customer into rental as a concept you can’t change anything,” added Prew, who is also keen on showing women the revenue possibilities from becoming lenders themselves.

“I want to empower women to understand that if they’re buying a second hand dress at 200 pounds, they can rent it out five times and then anything above that is pure profit — that kind of mindset around clothing is super interesting. We’ve had lots of cases of women loaning a pair of Sleeper pajamas and making a 400 pound return in six weeks,” she added.

From the brand perspective, circularity is the next big focus, after working on achieving a sustainable supply chain.

“Rental is the perfect way to rent for a moment in time or to try before you buy and road test for your forever wardrobe,” said Amy Powney, creative director of Mother of Pearl, which is debuting its own rental service in partnership with OnLoan, another London-based rental platform operating with a subscription model.

“We are unsure as to whether our existing customers have the appetite to rent but we do know many are conscious about fashion and sustainability. The partnership will be interesting to see if our customers instantly adopt the model or whether our collaboration introduces them to a new way of consuming,” she added.

London-based jewelry designer Alighieri is also venturing further into rentals this month, having seen “huge demand” from the label’s recent launch on Hurr’s platform.

“I think rental has the potential to become a really significant part of our business because this model is a pure reflection of our brand ethos: Storytelling and sustainability. It also makes us even more accessible to the customer who would usually save up for their Alighieri talisman over time,” said Alighieri founder Rosh Mahtani, who, encouraged by the positive response, decided to introduce rental on her own platform for the brand’s bridal pieces, which come at a higher price point.

“What I love about jewelry is the fact that it is passed down through generations, across all cultures since the beginning of time. How absolutely wonderful and exciting to project this idea of sharing and meaning in a rental format. Each of our pieces has a story, and invites the customer to unlock their own narrative. I think it’s absolutely beautiful for somebody to wear it, imbue it with their adventures and then bring it back for the next person to do the same,” she added.

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