Business

As clothing rentals take off, this Canadian company is expanding its offerings

Clothing rental options are evolving from one-off, special occasion outfits to subscriptions for everyday clothing, and Rent Frock Repeat is hoping to get in on the trend.

Traditional retail chains also getting into clothing rental business

Rent Frock Repeat co-founders Kristy Wieber, left, and Lisa Owen, right, are gearing up to relaunch their company as a monthly clothing subscription service. (CBC News)

Clothing rental options are evolving from one-off, special occasion outfits to subscriptions for everyday apparel, and a Canadian company is expanding its closet to get in on the trend.

Rent Frock Repeat is relaunching this fall as a monthly clothing subscription service, after eight years in the designer dress rental business.

"[The customers are] the ones that set this in motion, because the demand was there," said Kristy Wieber, president of Rent Frock Repeat.

Wieber and Lisa Owen were inspired to create the company after they were invited to a wedding and didn't want to spend hundreds of dollars on a dress they would only wear once.

They found a U.S.-based dress rental company online called Rent the Runway and thought their problem was solved. But the site didn't ship to Canada.

"It was a light-bulb moment for both of us," said Owen, who's now the CEO of Rent Frock Repeat. "We thought it was brilliant."

In 2011, Rent Frock Repeat began renting dresses for four to eight days at a time, for anywhere from $40 to $595 Cdn, depending on the retail cost of the dress.

Now, the company is expanding to a monthly rental subscription for everyday wear — from blazers to skirts, pants to blouses. Members will receive four to six pieces every month, for between $99 and $199. Subscribers will be able to pause their plan at any time, and the more expensive options will have other perks — such as swapping out items mid-month.

Clothing chains see potential

Rent the Runway has already convinced millions of Americans to rent clothes. It first launched as a one-off specialty dress rental service in 2009, and has since expanded to offer subscription plans, including an "unlimited" rental option for $159 US per month.

In March, Rent the Runway announced it had raised $125 million in a round of funding from investors, which would value the company at $1 billion US.

Traditional clothing chains see potential in rentals as well. Urban Outfitters created an offshoot called Nuuly to launch a rental service for women's apparel this summer. According to Nuuly, its warehouse and fulfilment centre will include "state-of-the-art laundry equipment operated by veteran laundry technicians."

The logistics of the various rental services work in a similar way. A customer picks out an item (or items) online, it's shipped to them, the customer wears it, then mails it back. The companies wash or dry clean each item before sending it out to the next customer.

Fashion industry analyst Tamara Szames said clothing rental is still a small trend, but definitely one she's watching. (CBC News/Laura MacNaughton)

Clothing rentals may seem better for the planet — shoppers avoid over-buying fast fashion items, and rented clothes are used and reused until they're no longer in acceptable shape. But the practice could have its own environmental issues, according to Tamara Szames, a fashion industry analyst for NPD Group.

"Think of the washing and the returns and the shipping — all of that back end," said Szames. "I'm challenged to know how environmentally sustainable that will be."

Szames can see the appeal for retailers, though, at a time when the apparel industry is struggling with a lack of growth, because people are buying less. 

"It all stems from the market being flat, so all these retailers are looking at ways to disrupt their retail business model," said Szames.

Ready-made rental technology

Many of the traditional retailers that have launched rental services in the U.S. in the past year — including Ann Taylor, Vince Unfold, American Eagle and Express — are using a technology created by a company called CaaStle. 

CaaStle's founder and CEO, Christine Hunsicker, said that for traditional retailers, subscription services attract new customers and more spending, rather than cannibalizing sales.

"We look at what we're doing as really partnering with the retailers and helping them grow their businesses and strengthen their brands, as opposed to displacing them," said Hunsicker.

According to Hunsicker, half of the people who sign up for a subscription are new to the brand, and the other 50 per cent spend more than they previously would have.

So far, the retailers CaaStle is partnered with don't ship to Canada.

"There's definitely a ton of interest for an unlimited rental subscription service in the Canadian market. I think we are probably 12 to 18 months away from expanding internationally," said Hunsicker.

At its previous peak, Rent Frock Repeat had 1,700 dresses. When the company relaunches this fall, it will have 30,000 different pieces available for rent. (CBC)

It's not a sure bet that people will stay interested in the rental trend, though. According to data from NPD Group, most U.S. consumers who signed up for a fashion subscription service unsubscribed within a year, with 56 per cent unsubscribing within three months.

"You need to think of how you continuously acquire new consumers," said Szames, or find a way to get them to stay loyal.

30,000-piece wardrobe

Rent Frock Repeat is doing a limited launch of its subscription service with 5,000 people this fall to test the technology and logistics, and get feedback on the clothing.

At its peak, Rent Frock Repeat had 1,700 dresses. When the company relaunches, it will have 30,000 different pieces — everything from blouses to skirts and blazers. 

"You have to have a big closet to dress that many women," said Owen. 

The founders aren't worried about stocking up on all that expensive inventory — they're confident it's what Rent Frock Repeat's customers want, because the company has asked for extensive feedback along the way.

"I'm so excited, because we finally recognize it's not a risk anymore," said Owen.

Younger generations are driving a new trend in retail: renting clothes instead of buying. You may not see the appeal, but even traditional stores are jumping on board. 3:05

About the Author

Jacqueline Hansen

Senior Business Reporter

Jacqueline Hansen is a senior business reporter for CBC News. Based in Toronto, she's been covering business and other news beats since 2010.