Rent or buy? What awaits the clothing rental industry in Canada

TORONTO – A few weeks ago, Carly Soares needed a dress for a wedding, and fast.

“I tried to go shopping at the mall, but I noticed there was a sparse collection of formal dresses,” the 30-year-old said. “It was actually very surprising. It’s still the kind of pandemic-loungewear environment in many retail stores.”

The dresses she found were either too casual or too expensive, so she decided to rent one from a dress rental boutique, something she had never tried before.

And after a positive first experience, Soares said he would definitely do it again.

Clothing rental has become more common in the last decade with the rise of the sharing economy, but the COVID-19 pandemic has not been kind to these types of retailers.

However, when pandemic restrictions were lifted, some Canadian rental companies saw an increase in traffic.

While experts believe there is still more opportunity in the space, they warn that growth could be moderate as Canadians change their purchasing habits and priorities in an environment of high inflation and rising interest rates.

There are other challenges as well, including getting more people on board with the idea of ​​essentially sharing clothes, people’s mindsets about the right kind of clothes to wear again, environmentally conscious consumers questioning how green the fashion rental and inventory logistics.

“We have been conditioned to buy something, use it, throw it away. Changing that to appreciate that rental opportunity is something that takes a long time,” said Daniel Drak, assistant professor at Parsons School of Design.

One of the most prominent clothing rental businesses, if not the most, is Rent the Runway, based in the US with outfits they could wear once or twice.

In Canada, a flood of new clothing rental businesses began to spring up in the years leading up to the pandemic, offering everything from special occasion wear to work wear, maternity wear and everyday wear, but like many companies in the small business retail sector, getting through the last two years was a challenge.

Canadian companies like Rent Frock Repeat, the workwear rental business Dresst, and Montreal’s Station Service have all ended their careers in recent years.

It’s a “very challenging” market, said Julie Kalinowski, CEO of Toronto-based The Fitzroy, which offers more affordable special-occasion dress rentals.

According to Drak, Generation Z will be the generation that really moves the industry forward due to their enthusiasm for reselling purchases, whether for economic reasons, with the goal of reducing clothing waste, or to find one-of-a-kind pieces.

He said now is the time for existing and emerging Canadian clothing rental companies to build on that popularity and make reselling a part of their business model, which some have begun to do.

The global resale clothing market was valued at $14 billion last year, according to Statista, and is projected to grow to $51 billion by 2026.

Toronto Metropolitan University (TMU) Assistant Professor Anika Kozlowski said making genuine efforts to reduce clothing waste and reduce emissions from clothing production, and operating as a local business to do so, could also be a good strategy, especially considering Canada’s smaller population. .

This would involve a strong understanding of the community in which the business operates, using high-quality Canadian-made items from ethical brands, finding ways to clean and repair clothing in a way that is not harmful to the environment, and avoiding long -distance shipping.

That’s something Blyth Gill is working on with Vancouver-based Tradle, an e-commerce baby clothing subscription business that lets parents rent and swap clothes for each growing period.

“Because babies outgrow clothes quickly, the need to have and exchange clothes is very short-cycle,” she said.

Trade works with high quality local brands, avoiding fast fashion brands. And when the clothes can no longer be reused, they will not be thrown away, but recycled or disassembled.

The company launched just before the pandemic, which Gill said was definitely a learning experience.

“Naturally, when we didn’t know that much about COVID-19, people probably thought, ‘Share clothes? I don’t know,” she said.

But Gill said he’s happy that phase is behind him and excited for the next stage of business growth.

Fitzroy’s Kalinowski is also quite optimistic.

“Since the last reopening, it’s been crazy, it’s been a boom, it’s probably been our best sales yet. It has been a great year for weddings, all the events are back, all the galas are back. We just had the Toronto International Film Festival, one of our busiest weeks. So he’s been very busy.”

Gabriella Iamundo, 31, wears fashion rental for special occasions, but doesn’t really see herself wearing it for everyday wear, sportswear or workwear, or subscribing to a service, a sentiment that Kozlowski TMU said it’s probably pretty common across the board.

“I rented (special occasion clothing) for the first time probably four or five years ago, maybe a little bit longer than that, and it just became something that I thought was good for events,” Iamundo said.

“To be honest, it’s pretty common in my circle of friends to check (rental services) to at least see what the options are, especially before you have to go out and buy something.”

Looking further ahead, Parsons’ Drak sees larger traditional brands starting their own rental segments, as US-founded Urban Outfitters has done, or acquiring existing businesses in the space, which would shake up the market.

This report from The Canadian Press was first published on September 25, 2022.

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