A Blog by Jonathan Low

 

May 29, 2021

Bye-Bye Pandemic Sweatpants. Fashion Is Back

Economic and social optimism based on increased rates of vaccination and a decline in new Covid cases appears to be causing an optimistic attitude towards fashion in direct contrast to the understated quarantine Zoom era. JL  

Elizabeth Paton and Sapna Maheshwari report in the New York Times:

Retailers have reported a surge in apparel sales. In recent weeks there is a post-pandemic ebullience emerging in how Americans are dressing. Daring new trends have started to emerge in terms of what women want to wear — bolder, brighter and sexier styles. As quarantines have lifted, so have hemlines. Rent the Runway has seen four times the demand for crop tops in 2021 compared with 2019, including triple the demand from women 35 and older, (not) just for the nightclub — they’re also making appearances at baby showers. 

It’s been more than a year since the coronavirus brought events and socializing to a screeching halt, prompting much of the United States to settle into sweatpants and stay indoors for months on end. Yet in recent weeks — and particularly in parts of the country where life is edging back toward normalcy — there is a post-pandemic ebullience emerging in how Americans are dressing.

Traditional retailers like T.J. Maxx and Macy’s have reported a surge in apparel sales. And clothing rental platforms such as Rent the Runway say they are reaping the benefits after a perilous year of layoffs and slashing budgets.

Rent the Runway’s chief executive, Jennifer Hyman, said this month that users had been returning to the service in droves. Since a pandemic low last May, there has been a 92 percent increase in active subscribers — lured in part by recent discounts — and the number of customers was on track to outpace 2019 levels by the end of the year.

Traditional rental hubs in the South such as Texas, Florida and Georgia were the first to show signs of recovery this year, though they are not yet back to 2019 subscriber counts, she added. Cities like Charleston, S.C.; Charlotte, N.C.; Nashville; and Phoenix saw large increases in entirely new subscribers, and growth has also come from smaller cities where the company had not done as much business, like Chapel Hill, N.C., and Knoxville, Tenn. In the New York metro area, the company’s average number of new subscribers each day in May was four and a half times higher than in February.

Daring new trends have also started to emerge in terms of what women want to wear — bolder, brighter and sexier styles than ever before. Some companies are calling this peacocking or hedonism, while Rent the Runway has been referring to it as the new “joie de vivre.”

“This is something we are seeing across the country in every age segment and is so different from anything we’ve seen in our 13 years of business,” Ms. Hyman said. The company’s data offers a near real-time view into what people are wearing — or not wearing. For example, it has seen four times the demand for crop tops in 2021 compared with 2019, including triple the demand from women 35 and older, plus a 44 percent increase in searches for outfits with cutouts. Cutouts aren’t just for the nightclub — they’re also making appearances at baby showers, the company said.


“It is truly surprising that women above the age of 35, women in their 40s, are renting crop tops at the exact same rate as our teenagers on the platform,” Ms. Hyman said.

And as quarantines have lifted, so have hemlines. From coast to coast, mini dress shipments have doubled this year versus 2019. Neon colors and “loud prints” are on the rise.

“Colorful, optimistic clothes, bags and jewelry are being rented by women of all sizes — the same styles are popular from size 4 to 20,” Ms. Hyman said. “People are really in the mood to get back out into the world and celebrate.” Despite her company’s enduring such a sustained period of uncertainty and low revenues, she insisted that she felt bullish about the prospects for the fashion rental market.

“After being trapped away from the people we love for long periods of time, values will change,” she said, noting that people had been stuck at home with “all the stuff that was purchased in the past that doesn’t get used or that takes up valuable space.”

Consumer psychology has shifted irrevocably over the last 15 months. Along with a growing reliance on e-commerce and online services, greater concern for sustainability has prompted millions of consumers to reconsider their previous spending patterns. And the sharing economy continues to reshape numerous aspects of society, like the prioritizing of access over ownership. According to Claudia D’Arpizio, a partner at Bain & Company who focuses on the fashion and luxury sector, the pandemic could actually make apparel rental — and its sister industry, fashion resale — among retail’s biggest winners in a new era of consumption.

“When you ask young people in particular about secondhand and rental fashion, it is clear they believe it is the future,” Ms. D’Arpizio said. “Of course, as this market grows, efficient delivery, returns and logistics — which have an environmental footprint of their own — become a more complex and expensive consideration. But the fact that you now have an increasing number of old-guard brands and retailers entering the space underscores the fact that the industry thinks it is an opportunity that is only going to grow."

Apparel sellers were pummeled last year, and Rent the Runway was no exception. Before Covid-19 hit, the New York-based company was rapidly expanding, with mailrooms at Wall Street firms piled high with its bags of returns on Mondays, and an expanding network of drop-off points at WeWork locations. It had introduced a partnership with West Elm for renting “bundles” of pillows and throws and declared its plan to “create the Amazon Prime of rental.”

The spread of Covid-19 halted that momentum, ushering in a period of paranoia around sharing and touching common surfaces. Rent the Runway, which had previously allowed customers to put their subscriptions on hold for a few months, scrambled to offer an indefinite pause so that customers wouldn’t drop the platform entirely. While some continued to rent sweaters and cozy clothing, many paused or left.

The company closed its five retail stores in major cities, laid off or furloughed half of its staff (though it declined to specify a figure) and dropped its unlimited subscription option. In the fall, it raised a fresh round of funding at a $750 million valuation, losing the coveted “unicorn” status it had achieved in early 2019. (Rent the Runway, which is backed by venture capital, has raised about $400 million over all and will most likely seek an initial public offering at some point. It does not disclose sales or profit figures.)

Ms. Hyman said the valuation dip did not mean anything. The company needed money to ensure it was prepared for any scenario, she said, pointing out that nobody knew when the pandemic would abate.

Of all the changes Rent the Runway made to its business last year, the biggest was the shift from its unlimited offering, which had allowed subscribers to swap as many items as they wanted for a monthly fee. Now, it offers a few different tiers — users can rent up to four items per month, in one shipment, for $89, or up to 16 items, and up to four shipments, for $199. The new model appeals to a broader array of customers and is more cost effective and better for the environment, Ms. Hyman said, as it cuts down on the nonstop deliveries and dry cleaning.

Traction in the men’s wear rental market continues to be slow, but before the pandemic, the sector was surging for women.

Urban Outfitters introduced its rental service, Nuuly, in 2019, and offerings had cropped up from a wide variety of mall chains and other brands, like Vince, Rebecca Taylor, H&M and Ganni. Major department stores such as Selfridges in London recently began high-profile women’s wear rental programs, and this year Ralph Lauren became the first luxury brand to offer direct clothing rentals.

For luxury brands, rental could represent 10 percent of revenue by 2030, according to a recent Bain & Company report. When an item is rented 20 times, for instance, it generates a profit margin of more than 40 percent, the report found.

While rental clothing services and their monthly subscription fees became far less appealing during the pandemic, secondhand clothing sites flourished, with companies like Poshmark and ThredUp going public. Coresight Research estimated the size of the U.S. rental apparel market at $1.3 billion in 2019, and said it declined to $1.1 billion last year. The firm expects a rebound to “at least” $1.2 billion in 2021.

Urban Outfitters, which owns Anthropologie and Free People, admitted in March that it had been a “difficult” year for Nuuly, as people stopped going out. The service, which accounted for less than 1 percent of the company’s most recent annual sales, makes money from subscription fees and selling rented items at a discount.

“It was a very difficult year around subscriber growth and a very difficult year in just sort of reading consumer behavior,” Frank Conforti, the company’s chief operating officer, said. “We saw so many go on pause, and their primary response to us was, ‘Listen, I’m just cutting back on expenses,’ and understandably so.”

Still, he said, subscribers are growing as the weather warms up.

Rent the Runway’s recovery began as soon as people started receiving vaccines in mid-February. Ms. Hyman said a major factor had been users’ willingness to celebrate even the smallest of occasions — so-called micro-occasions — beyond more obvious events like summer weddings, bachelorette parties, vacations and significant professional moments.

“She’s using us for a much wider and broad set of use cases, like dinner with a friend or brunch or a picnic with her family,” Ms. Hyman said of a hypothetical customer. “She just wants to appreciate and enjoy every moment."

The company will soon allow even nonmembers to buy its clothing at a discount, a perk long available only to subscribers. And this month will see the arrival of a new board member: the actress and Goop founder Gwyneth Paltrow. Ms. Paltrow said she had taken on the role in part because of her respect for Ms. Hyman, and because the company had the opportunity to define itself and what it meant to its customers in a post-pandemic world. Does that mean she’ll be getting a subscription?

“What’s fascinating is that, in my own way, I’ve been renting the runway for years,” Ms. Paltrow said in an interview. “Borrowing a dress from a designer for a single moment at a premiere or an awards show, then giving it back afterward. Now I guess everyone is doing it. But I’ve got my welcome code in my inbox, so I’ll soon be trying it out.”

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1 comments:

RED ARROW said...

Lately I often notice that fashion is coming back and I like it to some extent. But it would be nice if we had a mix. Old fashion like this and new fashion like lolaslashes, which have now become very popular among girls for their beauty and convenience. It seems to me that their symbiosis is a great idea to always look cool.

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