A clothing rental renaissance is underway.
Rent the Runway — the long-time leader in the space that teetered on bankruptcy during the pandemic — has rebounded. The company reported $306.2 million in revenue in 2024, a 2.7 per cent year-on-year increase since 2023, and said subscriptions are now just shy of pre-pandemic highs. Urban Outfitters’s Nuuly reported $378 million in revenue in 2024 during its first profitable year. The company’s first-quarter earnings showed $124.4 million in net sales, suggesting that it may be on track to meet the ambitious $500 million revenue goal set by its parent company, Urbn.
Momentum is building across the rental landscape, ushering in a new era for the retail model that claims to keep clothing in circulation longer and reduce overconsumption, but has so far struggled to make the logistics work. Michael Gunther, head of insights at data firm Consumer Edge, attributes the sector’s growth to the rising price sensitivity among consumers. Over the past six months, rental platforms tracked by the firm have reported year-on-year growth of more than 20 per cent. New players have been quick to ride the wave. In June of this year, luxury accessories membership club Vivrelle closed a $62 million series C round led entirely by venture capital firm Protagonist. Peer-to-peer player Pickle raised $12 million in series A funding before its third birthday, and earlier this year, Bnto launched a promising AI-powered rental service targeted towards Gen Z style.
Rental platforms are creating a revised playbook to drive their next phase of growth. Inventory is king, particularly among younger consumers eager to snag the next It-dress or bag. To keep catalogues fresh, rental companies are teaming up with brands for a steady stream of new and exclusive items. Businesses are also zeroing in on less glamorous — but equally critical — operations like streamlined delivery and returns to enhance the user experience. Nuuly is investing in machine learning to make decisions on matters like wash cycles and repairs, all in the hopes of extending the life of each garment. At the same time, platforms are racing to personalise the user experience by helping shoppers discover the right pieces faster and giving them more reason to return.
If they get it right, rental companies have a chance to reposition themselves as an essential extension of retail that reframes luxury as something to borrow, not buy. It also aligns with a generational shift: younger shoppers with self-proclaimed commitment issues prioritise access over ownership and flexibility over commitment. But despite this cultural momentum, rental platforms still face real headwinds — from lingering stigma around ‘used’ clothing to the inherent instability of subscription models in a tightening economy.
Race to reinvent rental
Rental customers expressed catalogue fatigue long before the pandemic dealt a blow to the category’s momentum. Inventory — specifically enough size variety and newness — is directly related to growth at Rent the Runway, according to co-founder and CEO Jenn Hyman. During the business’s Q1 earnings, the company announced its largest inventory investment to date. As it expands its assortment, Rent the Runway will continue to prioritise a “playful, polished and feminine” aesthetic, building around pillar brands like Veronica Beard, Tanya Taylor, Ulla Johnson and Staud, while also debuting exclusive collaborations with labels such as Simon Miller, Rixo and Ganni. In total, the platform counts 750-plus brand partners — and Hyman is actively working to double that number this year. She expects to add 40 brands and over 2,700 styles by the end of the year, representing a 134 per cent year-on-year inventory increase.
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“We found that when people have both a broader selection and more availability of the inventory that they love, they stay at Rent the Runway for longer,” Hyman shares, “ and in Q1, we saw the strongest quarterly retention that we’ve seen in four years.” Rent the Runway ended the quarter with over 147,000 active subscriptions — up nearly 23 per cent from the previous quarter and marking the highest quarter-end subscriber count in the company’s history.
Competitor Nuuly has steadily positioned itself as a market leader. The company’s more youthful positioning, powered by more accessible prices, has helped to strengthen customer loyalty, according to Gunther. Consumer Edge data shows that Nuuly retains over 30 per cent of its subscribers within the 12 months following their first purchase, compared to just 10 per cent for Rent the Runway. In the six years following its 2019 launch, the company has grown its active subscriber base to around 380,000 — a 53 per cent year-on-year rise. “Urbn believes that this is a billion-dollar opportunity,” Nuuly president David Hayne says. “I don’t think it’s limited to that either.” For Urbn, Nuuly functions as an inventory outlet for its brands — Free People, Anthropologie, Urban Outfitters — while carrying hundreds of outside labels, plus vintage pieces.
On top of inventory improvements, the user interface is being rethought with a fresh tech spin. Both Hyman and Hayne speak of major tech investments on the horizon. Rent the Runway is doubling down on its styling support, citing a 27 per cent reduction in first-month churn when subscribers engage with the tech. It also introduced a highly requested “back in stock” notification system, leading to 48 per cent of users successfully adding an item to their cart when prompted. In Q2, Rent the Runway plans to build out a robust rewards programme and enhance its “hearting” features to deepen subscriber engagement and further retention.
Nuuly, meanwhile, is focused on enhancing backend support for its warehouses and frontend customisation for its users. In 2025, Hayne and his team are testing new models that will allow them to capitalise on the treasure trove of customer reviews on Nuuly’s site, matching customers with the most relevant feedback based on sizing and fit, among other personal preferences. The attention of both companies to ease of use — from shipping and returns to search — mirrors a larger shift across the fashion industry towards frictionless shopping.
Rental reboot
Rent the Runway and Nuuly will also need to face off against younger and fresher market entrants.
Peer-to-peer rental models strive to tackle delivery frictions head-on. These platforms offer quick turnaround times for event-specific rentals and access to niche wardrobes. New York-based peer-to-peer rental app Pickle capitalises on its reputation as your favourite influencer’s favourite clothing app. The company’s aforementioned series A fundraise comes on the heels of a threefold increase in active users between 2024 and 2025. Co-founders Julia O’Mara and Brian McMahon built the platform for users who are “in a pickle”, with nearly half of all orders placed for same-day or next-day delivery. Early adoption from city-based influencers initially pushed Pickle into the spotlight, but O’Mara is quick to note that they account for less than 2 per cent of the platform’s inventory. That being said, many users turn to Pickle to chase viral trends. Fans of influencer Halley Kate, for example, could rent the viral LPA dress she wore in Paris via Pickle just one week after the fact.
Pickle, among other peer-to-peer platforms such as Tulerie, is rooted in community. Such community-based excitement empowers younger generations to make hundreds — sometimes even thousands — of dollars in additional income via their closets each month, and has created grassroots networks in cities from LA to Miami. But many people believe that peer-to-peer rental can only scale so far, given the burden it places on individuals to coordinate deliveries and servicing.
While peer-to-peer platforms thrive on convenience and community, luxury accessories rental through services like Vivrelle take a more curated approach, prioritising brand partnerships, seamless service and exclusivity. The Vivrelle membership club has partnered with several brands that cater to high-end clientele, including Four Seasons Hotels, whereby guests can access on-site Vivrelle stock during their stay. Vivrelle also works closely with online retailer Revolve, with which it is launching a proprietary AI styling agent named Ella, designed to help shoppers complete their outfits at checkout with Vivrelle accessories.
New kid on the block Bnto is making the most of Gen Z’s “commitment issues”, with an AI-native interface and next-gen brands for the same price as Nuuly. The company utilises overseas warehouses to avoid tariffs on ‘if you know, you know’ brands like Seoul-based Andersson Bell and London-based Damson Madder.
Previously, Bnto founder and CEO Sixuan Li launched retail company Viavia as an A/B test selling the same hundreds of global brands that Bnto would eventually rent out. “We were able to observe the same user’s behaviour across different modes of consumption, and think about when you buy something, you might buy something that’s more timeless, more comfortable, or that you wear very often,” Li explains. “When it comes to rental, you might rent something that’s bolder, more fashion forward and more unique.”
Li is building Bnto as an omniconsumption platform, where consumers can decide between renting and purchasing the same products. The app’s algorithm will guide users towards the best options based on their past behaviour and price sensitivity. For example, someone who frequently rents and later buys Collina Strada pieces through the app might be prompted to purchase a pair of jeans from the brand outright, given their previous user activity. Notably, since launching rental options with Bnto, Li has seen inventory move 17 times faster and customer acquisition costs drop by 70 per cent.
Gen Z may be driving the rental boom, but the endless possibilities — Li believes rental is a $100 billion market and sees her company eventually going public — mean that multiple platforms have room for growth. This momentum represents a recalibration of how consumers think about clothing, ownership and value, with tech innovation possibly accelerating this shift. But founders across the board argue that rental is succeeding because it solves real problems. For consumers, it’s a way to experiment more and spend less. For brands, it’s a chance to build loyalty without relying on constant markdowns or overproduction. And for the industry at large, it may just be a path towards longevity in an era of faster cycles and growing climate pressures.
“A rental model allows people to have fun again,” Gunther notes. “It’s a nice compromise between pulling back completely and spending a tonne of money on something that you’re not going to wear often. That’s pretty important in this environment.”
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