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Can fashion brands survive the transition from sale to rental?

Alison Cole

By Alison Cole

Senior Trade Mark Attorney

In the digital age, consumers are growing used to the transformation of brand offerings from product ownership to service models. This change in consumer habits has seen the end of many traditional brands and the creation of new ones that we now just couldn’t live without. Consider the shift from renting Blockbuster videos to streaming on Netflix and from buying CDs in HMV to listening to music on Spotify. Such brands are building new business models and redefining their industries — think Zipcar, Deliveroo and AirBnB. These ideas satisfy our hunger for newness while embracing sustainability.

Waking up the fashion industry

Traditionally, the fashion industry arguably has the greatest hunger for originality of all. It’s now starting to wake up to responsibility and prioritise sustainability over fast trends.

The New Yorker estimates that "twenty per cent of what the USD 2.4tn global fashion industry generates is thrown away”. In fact, the average garment is currently worn just three or four times, when clothing can generally withstand 200 wears. Sustainability and circularity have been the buzzwords for fashion brands for a while now and the concepts of reusing and recycling clothing are beginning to gather momentum.

However, we’ll still have a while before we see a real effect. Unfortunately, fast fashion produces a throwaway culture and our overall consumption of fashion really needs to decrease. As with all environmental changes, what really needs to happen is for the third ‘R’, reduce, to take place. This has been a difficult reality for the industry to grapple with, but is necessary to placate the conscious consumer and make a positive environmental change.

What’s being done?

Certain brands have set up return schemes, such as TheRealReal x Stella McCartney, and the trends of ‘swishing’/’shwopping’ are sweeping through the industry. In addition, a new wave of brands are emerging in the field of fashion rentals, extending the lifespan of existing garments. A decade ago, Jennifer Garner uttered a memorable phrase in Sex in the City: “It’s a rental — like Netflix for purses.” That same year, Rent the Runway was born. It featured the slogan “Buy less. Wear more. Be you.”, enabling consumers to borrow clothes from hundreds of different brands.


However, persuading brands that their products should be rented, not owned, is going to be a little trickier. Jan-Hendrik Schlottmann, CEO of fashion house Derek Lam, hesitated before putting his label on Rent the Runway, saying: “Do you cheapen the brand, do you make it too available? Yes, maybe, to a certain extent. But I think to counter fast fashion is enough to take those risks.”

Nevertheless, in today’s difficult retail climate, being innovative and flexible may be the key to survival. Fast fashion relies on brands getting all runway looks to the high street as soon as possible, so that there’s no time for companies to gauge demand — leading to oversupply and well-publicised issues around the destruction of excess stock. Rentals allow better data gathering in relation to popular products and how consumers are shopping and behaving. In theory (and with time), this should allow for changes to colours, cuts and prints without overproduction. The rental model is also an efficient way for brands to acquire customer awareness and loyalty by getting their pieces worn by real people, which is cheaper and more genuine than using influencers.

At first glance, it would seem that rental clothing is a niche that could only apply to established luxury fashion brands and/or specific occasion wear. However, companies ranging from Danish maternity and childrenswear brand Vigga to US label Nudie Jeans have also started to lease clothing. Rent the Runway has even launched an ‘unlimited’ service, which rents out ‘daily’ outfits for a monthly subscription. Such is the perceived success of renting clothing and accessories that Rent the Runway recently acquired a funding input of USD 20m from Alibaba’s investors, putting the company’s value at USD 800m, according to Allied Market.

Ultimately, companies following this model rely on the underlying value of the brands that they stock. However, this new business model, coupled with technology such as CaaStle by Gwynie Bee to manage storage and cleaning services, is giving brands a way of accessing a new kind of consumer. This has led to the valuation of the global online clothing rental brands of USD 1,013m in 2017 — a figure which is estimated to reach an even more impressive USD 1,856m by 2023.

Prepare yourself for the future of fashion

If these trends continue, the future for fashion will be bright and sustainable. Whether you’re a new fashion brand looking to break into the market, or an established brand trying to keep ahead of the game, clothing rental should be a major consideration. This means that you must have your own brand protection locked-down in order to set up your own scheme (or join an existing one), without losing site of your creative vision.

To find out more about brand protection, feel free to get in touch with me at ajc@udl.co.uk. You might also want to see our trade mark FAQ pages for more information.

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