Rental Businesses Make Leasing Dresses Fashionable

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It's New Year's Eve and you're headed to a fancy event. But, what to wear?

It has long been an accepted practice for men to rent formal wear, but until recently, women looking for a glamorous gown for an evening out were left to buy one or borrow from a friend. Fashion “rentals” were the exclusive territory of celebrities and their stylists.

But, in 2004, when the founders of fashion rental company Bag Borrow or Steal (now called Avelle ), noticed the women in their lives constantly borrowing each other's purses and jewelry for special events, they knew they were witnessing a business just waiting to be born.

The company, which shot to national fame after being featured in the 2008 film version of “Sex and the City," knew the Internet was the way to make the business work.

“There was a way to do a rental business, and the Internet’s the way to do it,” Avelle's now president and CEO Russ Blain said.

[The backstory on why Bag Borrow or Steal changed its name.]

The online company soon was at the forefront of providing the “Cinderella experience” to women of all walks of life.

Among its services to clients, Avelle offers monthly or seasonal rental options,  return delivery and dry cleaning.

Recession-istas

Rent the Runway is a members-only online site that rents out clothing and accessories by more than 95 high-end designers for about 10 percent of their retail prices.

Co-founders Jennifer Hyman and Jenny Fleiss said they saw an opportunity to cater to women who didn’t want to purchase luxury fashion without trying it on first.

“I started Rent the Runway so that women can experiment with fashion, try new designer brands and then decide which pieces they want to invest in,” Hyman told BusinessNewsDaily.

Such rental companies were well-suited to withstand and even benefit from the recession. While many companies selling expensive luxury items took a hit, the rental model offered women a more economical way to look high-end.

“In a recessionary climate, women have become much more conscious of price per wear for each item of clothing they own,” said Hyman. “Launching Rent the Runway in 2009 during the recession has certainly benefited us, but we've seen that, even as the economy has gotten stronger, interest in renting the runway has not faded.”

The company also has found another way to engage its customers. It is “a great way of providing more novice fashion enthusiasts with styling resources,” said Fleiss, referring to Rent the Runway’s team of stylists, available to chat with customers about their fashion needs.

Stress-free service

Belly Bump Boutique, which debuted in 2008, rents out elegant special-occasion dresses for women in all stages of pregnancy. Julie Ann Christoi Siksa said she started the company after seeing a seven-months-pregnant friend struggle to find an affordable dress for a wedding.

Belly Bump, too, has benefited from the recession’s effect on consumers’ spending habits.

“We have most certainly seen an incline in rentals from month to month, and the economic recession is a catalyst to our growth,” Christoi Siksa said.

“There are over 4 million pregnant mothers in the U.S. who spend an estimated $1.5 billion on maternity clothing each year,” Christoi Siksa said. “I knew that an alternative solution needed to become available when it came to maternity formal wear.”

Belly Bumps’ rental price for an outfit ranges from about $75 to $100. The rental period is seven days, and the fee includes return shipping and dry cleaning.

“Our philosophy is to create a stress-free experience,” said Christoi Siksa.

She thinks the fashion rental industry is poised for further growth. “In the near future, we will see the rental model become just as popular for women as it is now for men,” she said.

Fit for a queen

Finding ways to engage with the customer, offering added services and making the experience as stress-free as possible are big parts of rental businesses’ success. While brick-and-mortar retailers can entice even the most tight-fisted shopper with a beautiful gown properly displayed, e-commerce-based rental businesses have to find other ways to keep their customers coming back.

To that end, Rent the Runway offers options like ordering a free back-up size, and Belly Bump offers hassle-free exchanges if an item does not fit.

All three companies use social media like Facebook, Twitter and blogs to market themselves, and their founders agree that social media are key to gaining customers.

Avelle’s Blain believes renting fashion will become more mainstream as word spreads among customers.

Luxury goods like cars and condominiums are already leased, he noted.

“The fashion rental model applies this idea to more personal items and allows for unprecedented access to the world’s most expensive fashion items and accessories—a very appealing prospect for fashion-conscious women,” Blain said.

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