Rental companies are growing, and fast fashion should be scared … – Business Insider


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Nordstrom x The Black TuxNordstrom

Renting isn’t just for your prom clothes anymore.

Chic startups like Rent
the Runway
and The Black
Tux
have changed the rental game, offering high-end tuxedos
and dresses to rent for a set period of time.

Customers have flocked to the startups’ offerings. Rent the
Runway reached its
annual goal of $100 million
in sales last November, according
to Forbes. As of January, The Black Tux was
doing $2 million in sales
a month with a two-fold increase
year-over-year.

It seems that shoppers are increasingly seeing renting as a good
opportunity to step outside their normal style or to obtain a
fancy garment for an event.

Now department stores, looking for a way to draw in a younger
crowd that is more likely to be interested in renting, are
partnering with these brands to offer more options to shoppers.
In November, Neiman Marcus made a deal with Rent the Runway for a
store-within-a-store concept in San Francisco. The Black Tux
recently began a trial partnership that calls for the creation of
rental locations within six Nordstrom stores across the US.

It’s the first rental partnership for both stores, which are
hoping that before and after appointments, shoppers will browse
the aisles and walk out with more products than just a rental.
The rental companies, on the other hand, are just happy to be
associated with well-known, established, and trusted brands that
have more locations to service potential customers.

“We’re a purchase people are making for a very important day — we
need as much trust as we can possibly get,” Andrew Blackmon, a
cofounder of The Black Tux, told Business Insider.


The Black Tux
Facebook/The
Black Tux


Though it may seem that these rental outposts in Nordstrom and
Neiman Marcus could steal sales from the department stores’
existing offerings, the startups don’t think that will be the
case.

“It’s a totally different market,” Blackmon said. “The price
points for [Nordstrom’s] tuxedos are fairly high, so there isn’t
really any cannibalization.”

A typical Nordstrom tuxedo carries a price tag of at least $800,
while the store’s private label sells one for $430. Compare that
with The Black Tux, where an average tuxedo rental will cost you
$125.

Blackmon said he saw his competitors as other suiting companies
that sell their suits for $150 to $300 — firmly fast-fashion
territory. “A lot of people are using us after having an
experience there,” Blackmon said.

Rent the Runway founder Jennifer Hyman
told Forbes
that she had also seen her customers move away
from fast fashion and turn to renting from her company, often
supplementing those rentals with buying investment pieces.

“Rent-buy is the new high-low,” Hyman
told Forbes
, noting that a customer may buy a black dress but
rent a hot pink one for a special event.

Fast fashion, which is clothing made and sold cheaply with a
condensed supply chain so it can capture ongoing trends, used to
be considered the “low” end of that equation. Since it’s in style
for only a season or two at best, fast fashion is often seen as
quickly disposable and worn just a few times before being
discarded.

It’s being pushed out by rental in these formal categories,
however, as the prices are similar but the quality and perceived
quality are miles apart. And if customers are going to wear the
garment only once anyway, it makes a lot of sense to rent
something that looks and feels better. Plus, the company will
take care of dry cleaning.


Rent the Runway
Rent
the Runway’s store in the San Francisco Neiman Marcus
location.


Rent the
Runway



The two founders agree that customers are looking for quality in
the garments they wear, and they’re not finding it in
fast-fashion offerings. The large gap in price between renting
and buying luxury and high-quality garments makes rental an
attractive proposition.

“I wouldn’t go so far as to say the future of fashion is rental,
but I would say rental will be a major component of the future of
fashion,” Blackmon said.

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