By Ellie Silverman The Philadelphia Inquirer
WWR Article Summary (tl;dr) "Nuuly" is an $88 subscription service where customers can choose six items from hundreds of brands each month. They can wear the clothes as much as they want and then either return or buy.
Urban Outfitters' new subscription service, Nuuly, launched Tuesday, allowing customers to purchase a rotating wardrobe of Anthropologie, Free People, and Urban Outfitters as well as other brands.
Philadelphia-based Urban Outfitters will be competing with similar services offered by Rent the Runway and Le Tote as demand for the clothing rental market continues to increase, estimated to grow from almost $1.3 billion now to more than $2.5 billion by 2023, according to the market research firm GlobalData.
Nuuly is an $88 subscription service where customers can choose six items from more than 1,000 styles from hundreds of brands in categories such as denim, dresses, outerwear, and vintage. The Nuuly website also includes an option to shop by categories like "Professional Development" for office-appropriate clothing and "Hit Refresh" for "weekend looks."
Subscribers will receive a package each month with the six items they picked with free two-day shipping. They can wear the clothes as much as they want and then either buy or return the items by the monthly due date. Customers can then repeat the process and wait for six more new pieces of clothes to arrive. Laundry and dry cleaning are included in the subscription.
"There are no late fees, no damage fees, no shipping fees, no fee-fees," Nuuly's website said on its Frequently Asked Questions section. "The only additional amount you'll be charged, unless you choose to purchase items, is sales tax where applicable"
Urban Outfitters Inc. announced its plans for Nuuly in May along with the company's first-quarter earnings report. The company said sizes will range from 00 to 26 with petite and plus-sized options.
"Nuuly is about discovering something you didn't know existed, loving something you never expected and surprising yourself in the best possible way," the website reads. " It's about expanding your outfitting options into the thousands, while keeping more of those $1,000s in your bank account."
The company estimates the retail value of one monthly Nuuly subscription package to be more than $800, David Hayne, the company's chief digital officer and president of Nuuly, said on the May earnings call with analysts.
Hayne said the company aims to have about 50,000 Nuuly subscribers within its first year, which would translate to more than $50 million in annual revenue.
"Nuuly seeks to further these shifting behaviors by giving subscribers access to a wide assortment of current fashion at a substantially lower cost per wear than retail," Hayne said on the call, "solving the paradox of a millennial's quest for constant fashion newness, alongside the desire for a more sustainable lifestyle."
In the company's first quarter, or the three months ended April 30, sales rose 1% to $864 million. Comparable retail sales at Free People rose 2 percent, and 1% at Anthropologie. Urban Outfitters' comparable retail sales were flat.
The company's stock is down about 28% so far this year. At the end of trading Tuesday, shares were at $23.55. ___ Distributed by Tribune Content Agency, LLC.