Urban Outfitters (NASDAQ:URBN) announced that the company is rolling out a clothing rental service, which will come out later this year.
Here are seven things to know about the service:
- The service will be rolled out this summer and it will be called Nuuly.
- Chief digital officer David Hayne, who is the son of one of the founders, will run the new service.
- He expects the Urban Outfitters service will attract 50,000 subscribers and rake in more than $50 million in revenue in its first year of business.
- A shopper can rent up to six items at a time for $88 per month from the company’s family of brands, which include Anthropologie and Free People.
- The service will also offer other options in clothing from the likes of Levis, Reebok and Fila, as some of these are sold in Urban Outfitters stores.
- The business said the service will give customers the option to infuse “freshness and variety into their wardrobes,” per a statement in the company’s press release. Shoppers who like certain items have the option of purchasing them.
- Urban Outfitters said that the goal of the service is to diversify its revenue streams, not replace sales.
“We certainly don’t think the customers are just going to stop purchasing,” Hayne told the Wall Street Journal. “Purchases make sense for things you know you’re going to use often; rental makes sense for things you would like to try.”
URBN stock is down 9.2% on Wednesday.