H& M Group Gets Into Rental Market
● Cos, owned by H&M’s parent company, will offer a rental service on China’s YCloset.
Rental clothing is going viral. This time it’s going to China by way of the H&M Group.
The Stockholm-based retailer, parent company to H&M, announced on Thursday that it is launching a three-month rental pilot program in China with its brand
Cos and the Chinese subscription rental platform YCloset.
“Subscription rental has been on our radar for some time and we feel this is a very relevant model for us to explore,”
Laura Coppen, who works in circular and sustainable business development at the H&M Group’s Laboratory, said in a statement.
She added that the test “will allow us to explore customer demand, the business model, potential to scale and different sustainability factors” while “exploring circular business models to transition towards a circular economy.”
Cos shoppers on YCloset, China’s largest fashion rental platform, which has 15 million registered users, will be able to purchase the products after the rental period is over.
“In this way, we can prevent the garment [from] being recycled too early, prolonging the lifespan and thereby saving virgin resources,” according to a company statement.
A look from H&M’s Conscious Collection. The Cos-YCloset pilot is actually H&M Group’s second appearance into the growing rental apparel market. The retail group, which also includes the Arket, & Other stories and Fabric Scandinavian AB brands, launched a small H&M rental program, consisting of pieces from the Conscious Collection, a line made from sustainable fabrics, in November. The rental program lets H&M customer loyalty members in the Stockholm flagship rent up to three pieces for a one-week period.
The store also offers repair services “to further inspire customers to reuse and recycle,” according to a press release.
H&M chief executive officer and president Karl-Johan Persson also hinted that the company would continue to update the assortment during H&M’s most recent conference call.
“The most important thing for us is to look at our business idea to have the best combination of fashion, quality, price and sustainability, and then we have to benchmark us against the customers’ expectations and us against our competitors in every market and follow that,” he said. “So, we’ll continue to invest.”
Meanwhile, the rental apparel industry continues to expand as consumers around the world — especially younger shoppers, or those defined as “Generation Z,” the cohort aged roughly 12 to 22 — grow increasingly concerned about sustainability. In fact, the total resale market’s is expected to more than double — from $24 billion to $51 billion — in the next five years.
Urban Outfitters, American Eagle Outfitters, Banana Republic, Bloomingdale’s, Ann Taylor and Vince are just some of the retailers that rent apparel. Then there are companies such as Rent the Runway, Le Tote, Gwynnie Bee, The Black Tux and Style Lend that purely rent out clothes.
The trend is two-fold: it gives consumers access to brands at higher price points that they wouldn’t normally be able to afford. It’s also more eco-friendly.
“Gen Z really focuses on R and R: that’s resale and rentals,” said Kristen Classi-Zummo, director of apparel market insights at the NPD Group.
“What’s interesting with rental is that it’s completely changing the market. We’re seeing it everywhere. We’re seeing not just high-end retailers, but middle and lowerend retailers launching rentals. So, it’s really speaking to the impact.”
She added that shoppers in the rental market aren’t segmented by income levels either.
“As income grows, above 50 thousand, above 100,000, the interest still stays in rental,” Classi-Zummo said. “It’s really a general trend. And it’s going to grow.”