Nuuly, a unit of Philadelphia-based Urban Outfitters, has stolen the show from Rent the Runway, the online clothing rental pioneer, writes Meg Tanaka for The Wall Street Journal.

While Rent the Runway was first to introduce clothing rentals to young consumers, it is Nuuly that is making the concept work. Renting clothes is a complex business requiring many skills, including trend forecasting, streamlining shipping logistics, and industrial-scale dry cleaning. Rental companies also have to move their inventory multiple times daily.

“Rental only works if you already have scale,” said Simeon Siegel, former retail analyst at BMO Capital Markets. “Urban Outfitters could afford the upfront investment and had the supply chain expertise to do it right.”

Nuuly, the subscription-based clothing rental service, was established by its parent company in 2019. Subscribers can rent six select items for $98 a month, which includes shipping, returns, and professional cleaning, and some can also be purchased at a discount. Meanwhile, Rent the Runway offers a similar plan at $129 a month for five items.

Nuuly has been growing rapidly and should surpass half a billion dollars in revenue this year.

“Long-term, we believe Nuuly could be a billion-dollar business within the Urban portfolio,” said Nuuly Chief Technology Officer and President David Hayne.

Read more about Nuuly and its success in The Wall Street Journal.

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