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Clothing rental stores could be next big US import

Clothing rental services could be the next big trend to disrupt UK department stores and shopping centres, following a new partnership in the US.

Luxury department store Neiman Marcus opened its first Rent The Runway boutique in its San Francisco store last Friday (18 November), with more to follow next year, as part of a bid to attract more millennial shoppers and counteract declining sales.

The 3,000 sq ft space showcases a rotating selection of clothes and accessories that shoppers can hire from Rent The Runway, alongside complementary items for purchase from Neiman Marcus.

Maureen Hinton, global research director at Conlumino, said the service could work “very well” in the UK: “Rental services could work very well in the UK, particularly in shopping centres where it makes the service more accessible – just look at the likes of Moss Bros.

“It is another trend to watch, which could get real traction around occasionwear and the bigger ticket items. While there are a few online players and some local firms that specialise in renting occasionwear, no-one has really done it in a big way in the UK,” she added.

“It may take market share away from some retailers, especially occasionwear specialists, so they will have to look carefully how to handle it.”

Independent retail analyst Richard Hyman believes the Neiman Marcus deal reflects trading pressures in US department stores and the need for online players to reach customers offline.

“To a degree it’s inviting a competitor into your backyard but you could say that about any department store with a private label that also runs concessions,” he said.

As for the UK, he pointed to the number of tie-ups where space in one store is being “let” to third party retailers, to mitigate the effect of having too many stores: “This is persuading them to get into bed with all sorts of people, and often the financials will be more attractive than the synergies, but needs must.”

The move comes as shopping centre developer Westfield revealed a growing appetite for clothing rental services in the UK. Its How We Shop Now report found there is a potential market for clothes rental worth £923m across the UK and more than 25% of Londoners would like to rent clothes.

Rent the Runway was launched online in 2009 by Harvard Business School graduates Jennifer Hyman and Jennifer Fleiss and now has seven stores in cities including Chicago, New York, Washington DC and Las Vegas.

In March, the firm launched an unlimited service for a flat monthly fee of $139 (£111) including shipping, dry cleaning and insurance. Shoppers can select three items from more than 350 designers including Jason Wu, Marni and Theory, and keep them for as long as they want, or swap any or all of them out for new selections.

 

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