Episode 125: The Rental-sode

There was a time…we’ve talked about it here before…when it was just so easy to sell stuff to people. I’m thinking like 150 years ago, maybe even 100 years ago. If you had it, people would buy it because there weren’t very many places to buy things. Everyone shopped local and small, because that’s just how it was. Sure, most shopping involved bartering and haggling (and that sounds like a nightmare to me), but most people made their clothes and other household items. And a shopping spree was more like the beginning of the Oregon Trail game, where you just stocked up on oxen, wagon axles, and rations. Or something like that…regardless of how accurate the Oregon Trail game was or was not, shopping wasn’t a past time. No one was listing it as a hobby on their OK Cupid profile, mostly because neither the internet nor internet dating existed. And making a hobby of shopping would have been even more depressing than it is now.

The department store arrived on the scene in the late 1800s, as the Industrial Revolution changed the way many people lived. More people left rural areas and began to work in factories and shops. People made less of their stuff because they were too busy working for someone else. So more shops opened to serve them. At the same time, gift giving became more of a thing. The department store–these “palaces of consumption” were the first place where one could spend a whole day shopping. They housed everything under one roof: from clothing to fragrances to candy and foods to gloves and books and home goods…it was all there, contained within these buildings that were as ornate and beautiful as the most celebrated churches and cathedrals. As I talk about this, I’m getting so sad and longing for the thrill of a fancy department store, versus the ones with stained carpet and empty racks that we’ve seen for so many years now.

Back then, the department stores were INNOVATIVE at selling stuff, at making things more appealing to customers. For one, the prices were fixed. There was no haggling for a new pair of silk gloves; one simply paid the price on the tag. The idea of “the customer is always right” was born, creating headache upon headache for all of us who have ever worked retail. The concept of “satisfaction guaranteed..or your money back” was also new. Yes, most stores did not have a return policy before the rise of the department store. And these department stores were innovative in the way they tricked customers into spending long periods of time within the four walls of the store, with cafes and nap rooms, reading rooms and art galleries, rooftop gardens, musical entertainment…one could shamelessly spend an entire day inside a Macy’s or a Selfridges.

The department stores lent a level of prestige and reliability to shopping. And when it was time for the world of retail and shopping to evolve into its next incarnation, department stores were a key component. Yes, the mall arrived on the scene. The department stores–in their prime “anchor” locations–brought people to the mall. And into the corridors between department stores, where they found specialty retailers like the Limited and Gap. And that’s how THOSE “specialty” retailers became the latest innovation in retail. Rather than serving everyone/everything as the department stores aimed to do, these retailers focused on a specific audience whether it was teenagers (Express), young women (Limited), young men (Structure), or children (Gymboree). Was your style more classic and casual? Go to the Gap. More preppy? Check out J. Crew.

There was a brand for everyone (as long as they landed in one of a few basic boxes). And customers liked this. They felt special. They gained a sense of identity. Is it sad that people base their identity around brands and retailers? Sure, but we know it happens even now. But it all began in this era. The innovation was identity! These specialty retailers soon eclipsed the department stores. By the 1990s, department stores felt old and stale. Brands like Limited, Abercrombie, Victoria’s Secret, J. Crew, Gap, Urban Outfitters…they became powerhouses that launched several brands under their vast umbrellas. It seemed that soon they would take over the entire mall.

But then the 21st century arrived.

And two things arrived on the scene: ecommerce (aka, shopping online) and fast fashion.

The department stores were so late to the game when it came to ecommerce, they never caught up. They were officially dinosaurs. We saw one department store after another declare bankruptcy, reorganize, and sometimes, disappear completely. The specialty brand megacorporations were still going strong, but after the 2008 financial crisis and the subsequent recession, they saw more and more of their customers opting for Forever 21, H&M, and Zara. These fast fashion retailers allowed customers to buy a lot of stuff for the same amount of money that would get them MAYBE one item at the specialty stores. Who was the dinosaur now? Retailers raced one another to the bottom in terms of pricing and deals. Then they competed to sell every trend before everyone else. That was where the “fast” part of it came into play. You know this story because you’ve been listening to Clotheshorse, so I won’t belabor it.

But by 2018, retailers could see the writing on the wall. It was harder and harder to compete with the fastest fast fashion retailers like Zara, who were literally finishing the garments on boats sailing across the Pacific, just so they could get clothes into the hands of customers even faster. Meanwhile the so-called “specialty” retailers no longer seemed to have a special niche at all. Lower and middle class people looked to luxury brands for identity. They weren’t getting that from the Gap. And the fastest fast fashion was there to fill in all the voids in their shopping routine. Ironically, retailers like Zara would find themselves feeling antiquated and threatened by 2020 or so, but that’s not what this episode is about. No, this is an episode about something else. This is an episode that begins in late 2018, when the big retailers, by now fast fashionified and flailing, were looking for a new way to rake in those profits. And there was a new idea emerging, something that had been around for a few years in a specialized way, but was prime for a wider presence. Customers had eco anxiety. Simultaneously, they were addicted to a steady stream of new clothes and new reasons to buy new clothes. Where was the delta between eco consciousness and a new outfit for every instagram post? Clothing rental. Finally, a new way for these worn out, slightly panicked retailers to cash in…by adding clothing rental to their business. What could go wrong?

Welcome to Clotheshorse, the podcast that derives a strange amount of joy from explaining complicated things.

I’m your host Amanda. And today–in this special “you only get to hear me talk” episode, I’m going to break down clothing rental. We’ll try to answer the question “is rental a sustainable option?” LIke a lot things we discuss around here, it’s complicated. That’s why it is a whole episode!

So before we dive in, I have to give you a bit of a disclaimer:

Remember that job I lost during the pandemic? You know, the one that let me go early in the pandemic, gave me two weeks of severance, and cut off my health insurance just a few days later? My employer was a new rental service that launched in mid 2019. In addition to literally picking out the entire launch assortment/onboarding the brands, I also did a ton of industry research in the early months of the brand (before it launched) as we worked as a team to figure out the best product to buy, what people liked to rent, how our competitors worked, and of course, how we could do better.

I’m not going to talk about my specific experiences at that job because of course they made me sign a severance agreement saying that I would never publicly nor privately say anything negative about the company. Instead, I’m going to be speaking to the research and conversations with vendors/other experts I had in that pre-launch research period. I’ll also be talking about things I learned after I lost that job via all sorts of research and reading. I will say this:

I came into the rental industry with the idea that it was more sustainable. In fact, it was the sustainability angle that made it an appealing position for me. My job before that had been my worst job ever, working for a very toxic “feminist” retailer in the Pacific Northwest. After I left that job, I was coping with a lot of PTSD, just completely decimated self esteem, and I was exhausted. I vowed that I would never work for any other company ever again. But then this company reached out. They knew my work well, they knew about my quote “legendary” taste, and they wanted to talk to me about this new, sustainable approach to fashion. I love style, I love helping people feel their best, and I’m obsessed with the planet…I thought that rental was the right path. Perhaps finally I could find meaning and purpose (outside of collecting a paycheck) from my career! So I took the job. Dustin and I packed up our cats, houseplants, and weird vintage possessions, and we moved across the country to Philadelphia, Pennsylvania.

It was a big and scary move. I had a lot of reservations about the whole thing, but the idea that I could be a major part of a new, sustainable movement…well, that made it all worthwhile.

Pretty rapidly I realized everything I thought I knew about rental was wrong. And I realized that the rental industry was riding a huge wave of greenwashing.

Let’s recap what we know about clothing consumption in this decade: in the last 15 years or so, the global production of clothing has doubled. Meanwhile, the average number of times garments are being worn has decreased by more than a third. And on average, Americans buy 70 new articles of clothing each year. And yes, that’s an average so if you’re sitting there saying “I’ve been wearing the same clothes since 1995,” and therefore, bought zero new garments last year…well then that means someone else bought 140 garments. That’s a simplification of course, but it’s an important illustration of where clothing consumption is right now. If 70 is the average, then there are just as many people buying more than 70 garments as there are people buying less than 70 garments. Shopping has become a past time for some and a mere habit/routine for others, but no matter how you slice it, we have become very accustomed to wearing a new outfit as often as possible. Influencers, social media, and retailers as a whole have created and reinforced “rules” around wearing something new for every event, every photo, every day of our lives. The concept of “outfit of the day” has never been about wearing your favorite outfit again and again on different days, it’s been all about wearing a whole different outfit (accessories and shoes included) as often as possible. Many people consider an outfit “old” if it’s been worn more than a few times. Yes, we have social media to thank for this. I like to imagine that fast fashion has been sending a steady stream of Edible Arrangements to Instagram world headquarters as a “thank you” for all of the sales the app has indirectly (and now directly) driven over the years.

Yet, for all of our addiction to new clothing, none of us are monsters. We care about the planet. We care about its people. Heck, we are the people of this planet. And we don’t want our clothing to destroy it. Yet the thought of changing our habits, of wearing less new clothes, of possibly being “cheugy” or “not put together” or whatever it is that we’re all worrying about…well, we are scared (or at least highly reluctant) to give up the lifestyle of clothes, clothes, and more clothes.

Well, rental is here to save the day. Or at least, that’s been the message for the past few years. Clothing rental began with a focus on special occasion wear (we’ll get into that) but as retailers saw a new revenue stream, a way to hold on to some more profit…it began to take on new form “wearing new clothes every day, for every occasion.” Never ever have to change anything on your end while minimizing your impact on the planet. That sounds pretty great, right? In fact, it kinda sounds…too good to be true, doesn’t it?

Last summer, a Finish study published by Environmental Research Letters shocked everyone in the sustainability community.

It tracked five different ways of consuming a pair of jeans…I want to say that I appreciate the choice of jeans for this study because jeans consume a lot of water and chemicals to create. I do not think it is hyperbole to say that jeans may be the most impactful garment we wear when it comes to energy and water consumption, water waste, and overall impact on the workers making, dyeing, and distressing our jeans and/or living near the facilities where all of this happens. Go check out the series of Clotheshorse episodes about denim with denim designer Michelle from the very early days of the podcast!

So back to this study…it examined five different ways of consuming a pair of jeans:

Wearing them and then throwing them away;

wearing them for longer than average before throwing them away;

reselling them;

recycling them;

and renting them.

In each scenario, they calculated the “global warming potential,” which refers to how greenhouse gases are emitted throughout the lifecycle of the jeans. They considered everything from manufacturing and transportation to washing and disposing of them.

The big shocker here was this finding: Renting clothes had the highest climate impact of all—even higher than just throwing them away.

I also just want to add here that recycling clothing–the actual act of disassembling clothing and using machines, chemicals, energy to turn it into materials/fabric/clothing, also has a very high climate impact because it involves a lot of transportation, water, energy, and chemicals…and even worse it creates the ILLUSION of a guilt free way to buy tons and tons of clothes, wear them a few times, and then dispose of them. Anna Härri, one of the co-authors of the paper, told Fast Company, “Recycling is an important part of a sustainable future. We encourage companies to keep investing in it. But it cannot replace reducing consumption.”

The way we have been consuming clothing in the fast fashion era will never ever be sustainable. Going back to that average of 70 new garments each year: that’s a new piece of clothing every five days. Do we really need to acquire something new that often? Ultimately, this study, along with so much other research, has indicated that there is only one path forward for reducing the impact of our clothing and that is (surprise, surprise) wearing your clothing longer/more often, shopping #secondhandfirst, and reselling or thoughtfully rehoming your own clothing when you are done with because it no longer fits or your life has changed, or YOU have changed. No one is expecting you to wear the same clothes your entire life, or wear ugly, ill-fitting clothing that you hate. You don’t have to give up expressing yourself via your wardrobe. But there are smarter, more sustainable ways of doing that. But of course those ways involve changing up our habits by changing the way we shop and WHERE we shop.

And these two things frighten the fashion retailers who are part of an entire industry built on overproduction and overconsumption.

The industry knows that it has a major problem on its hands, and while I’m sure there are many individuals working within who see the “environmental writing” on the wall, there are many more in the industry (mostly at the top) who are focused on a different kind of “writing” and that’s the in their P&L statements: as (or more like “if”) customers truly care about sustainability and make these changes in their habits and where they shop, sales of new clothing will decline sharply. And the majority of retailers are already feeling the squeeze of the fast fashion era, of oversaturation, of players like SHEIN who promise ridiculous amounts of cheap trendy clothing on demand, at rock bottom pricing.

This is why greenwashing exists and why we are seeing it become the norm, rather than the exception in brand marketing. Let’s take a moment to review the definition of “greenwashing;”

It is the strategy of conveying a false impression(or providing completely misleading information) about the environmental impact of a product or a brand. It is an unsubstantiated (meaning: unproven) claim of “eco-friendliness” that creates the illusion of guilt free consumption. The goal here is two-fold: create a sense of responsibility and ethics in a profoundly unethical and reckless industry and convince you to buy a little bit more because the things you are buying are magically “good” for the planet.

I’m not going to go too hard into greenwashing here because we’ve talked about it ad nauseum here on the podcast and on social media. But I do want to remind you of one of the most common greenwashing strategies: co-opting words that are essential elements of the sustainability movement and using them in bad faith to mislead consumers. “Sustainable” is actually a great example of a word that has been essentially ruined by all of the inaccurate, misleading ways it has been used by many industries.

Another concept/word that is being used more and more as a retail buzzword (rather than its true origins as a model for a sustainable, ethical economy) is “circularity.” See also “circular fashion” and “circular economy.”

Right now much of our economy (including the fashion industry) is linear: Raw materials are used to make clothing, we buy and wear them, then we toss them in the trash. Sure, some of those clothes get reworn, but not that many. And furthermore, we have been moving through the points on this line much faster over the last 15 years as we wear clothes less often before tossing them.

The circular economy requires keeping clothing in circulation for a lot longer. They are created, we buy them, we get the maximum amount of wear out of them before passing them on to the next wearer, via resale, thoughtful rehoming, upcycling, etc. When these clothes have given all they can to the world, they are recycled into new clothing, reducing the need for new material creation.

The industry has a few problems with the true, genuine circular economy. For one, fabric/material recycling just isn’t “there” yet, because for so long, it’s been cheaper to make brand new materials than recycle existing ones. So no one has been funding recycling technology–especially textile recycling technology–in any meaningful way.

Next (and this is the big one) the industry in its full fast fashion-ified glory cannot exist without overproduction and overconsumption. So if we wear our clothes longer, if we shop secondhand…what happens to the industry? How do all of these brands and retailers stay in business?

Let’s talk about that for a moment, because I get this question a lot. And while I’m sure sometimes that question is asked in a good faith way, like generally wanting to know what happens when we stop buying so much, I often feel that it is being asked in a bad faith way as a defense of overshopping.

Okay, so what happens if we buy less? Well, some businesses may go under. Or at least scale back. At least initially. And yes, people will lose jobs. Garment workers may lose jobs. Let’s think about that.

Right now the industry is built upon producing (and buying) a ton of stuff at the lowest prices. The conceit being that if you need a lot of new clothes all the time, you need them to be as cheap as possible so you can afford to buy them.

But what if we needed less new clothing? And we wanted it to stay “in the system” longer? Then clothing could be more expensive. It would have to be to make it higher quality and longer lasting. No more plastic zippers that break two wears in, right? One of the aspects of the “as many clothes as possible, as cheaply as possible” status quo is that factories (and therefore workers) have been squeezed on pay to keep those prices low. And it’s not just the workers making our clothing, but also those making the fabric, dyeing/printing it, creating the trims like zippers, buttons, labels, and so on. Everyone has been paid less and less. Retailers have shifted their supply chains to countries that regulate labor less and have a lower minimum wage (if one at all).

To be clear: while garment work is skilled labor and the work itself is important and essential, it is not a good job. We’re talking 12-14-16 hour shifts, 6 or 7 days a week for low wages that could never qualify as a “living wage.” We’re talking dirty bathrooms, abusive conditions, and wage theft. In some cases, we’re talking about forced labor and child labor. All to keep prices low low low (and super profitable for the select few at the top of the industry). This is not a “good job.” Fast fashion has not done a favor to garment workers. These human beings work and work, with little to show for it. They still live in poverty.

Once again, as consumers we are (perhaps accidentally) giving our consent to this abusive, exploitive system because we expect low prices. But what if we weren’t so hung up on that because we didn’t need a steady flow of new garments? What if they could be twice as expensive? So rather than expecting a dress to be $50 so we could buy many of them, we would be willing to pay $100 or even $150 because we would be buying significantly less new dresses?

What if garment workers could be paid a living wage? TBH, most experts say paying a living wage to garment workers would only raise the prices we pay for something by 1-4%, but imagine if we could do better than that? And yes, with less clothing being made, less people would need to make it. But maybe they could be working in the textile recycling industry. Or what if they didn’t have to deal with clothes at all and instead could become teachers, writers, activists, artists, stay at home parents, interior designers, musicians…the list goes on and on. Why do these people have to expect that “garment worker” is the best they can do?

The world would change if we bought a lot less clothing, and in so many ways. Shutting down the industry for a year would have the same impact as grounding all international flights and stopping all maritime shipping for a year. I’m not suggesting that, but instead I’m saying “what if we cut the production in half?” Going from 100 billion garments each year to 50 billion. That’s still plenty of clothing.

The thing is…this kind of change is scary for retailers because overconsumption is built into their model. It’s hard for them to see a way out of it. And (especially for the publicly traded companies) reduced sales and profits is a hard pill to swallow.

So here comes the greenwashing of circularity. Rather than making true efforts toward reducing the impact of the industry, brands are co-opting elements of the circular system and turning them into marketing stories. Like, instead of truly investing in development of clothing recycling technology, they are bragging about the small percentage of recycled fibers used to make a garment (never mind that the majority of the fabric is brand spanking new fibers). Or rather than shifting their entire supply chain into processes and equipment that use less water and energy, they are bragging about one collection where the production of a few pieces uses less water. And of course, they are never talking about the workers involved in any of this.

Rental (and now secondhand) are part of this “circular-washing” that retailers are doing. Rental and secondhand are a great way to keep their hands in their customers pockets without having to make any larger systemic/ethical changes. Losing a customer on the “brand new clothing” side of the business? Move them over to the rental side and continue taking their money. Or even better…make a profit selling them new clothing, then take another cut when they resell the clothing they bought from you on YOUR resale platform.

By the time I took that job for this new rental platform in 2018, the rental industry was getting a lot of buzz in both the business and fashion press. Renting clothing is nothing new: renting formal wear –specifically suits and tuxedos–has been around for a very long time. Some of us have rented uniforms for work. In 2004, Lloyd Lapidus and Greg Pippo (two friends who definitely did NOT have a background in fashion) launched Bag Borrow or Steal, a service that rented luxury handbags, sunglasses, jewelry, and other accessories. You might recognize this service from its cameo appearance in the first Sex and The City film, where Jennifer Hudson shows off a steady stream of rented designer purses.

In 2009, two Harvard Business School graduates, both named Jennifer (Hyman and Fleiss) launched Rent the Runway. I won’t go too much into that story because it’s often tossed out there as a #girlboss success story, and you know how I feel about that kind of stuff. The platform began as an option for renting special occasionwear (mostly) and to be honest, that’s an idea I can get behind. In fact, I would love to normalize renting bridesmaid dresses, formal wear, even wedding dresses! So many things that get worn one time BY DESIGN!!!

In 2016, Rent the Runway debuted their Unlimited plan (I’ll get into that later), really shifting away from rental as a once-in-a-while service to a part of daily life. A few years earlier–2012 to be exact–LeTote arrived on the scene, offering the opportunity to rent everyday wear, from work clothing to workout clothing. Another company, CaaStle, jumped into the mix to offer this kind of everyday clothing rental, both with its own in-house brands Gwynnie Bee (plus size clothing) and Haverdash, but also brand-exclusive rental from Express, Ann Taylor, NY & Company, and others. American Eagle was about to offer rental and it was rumored that Abercrombie was thinking about it. Lots of smaller rental startups were popping up, too. You know how everyone has been talking about resale (and launching their own platforms for it) for the past few years? Well, rental was being cast as THE FUTURE of fashion in 2018!

Let’s go back to that study that determined that renting clothing has a higher climate impact than just throwing away clothing…

Renting generated the highest amount of emissions because of all the transportation involved. Let’s think about that for a minute, using a dress as an example:

First the dress is made overseas (most likely) and shipped across the ocean via boat or airplane. Most likely, that dress was transported via air and not the ocean. Before that, it was transported via truck to the port/airport.

Next the dress was trucked from the port to the rental company warehouse. Most likely there was another stop in between at the vendor’s warehouse. All of these stops are pretty standard for all brand new clothing, whether it’s rented or bought.

Next the dress was shipped out to the first renter. Still pretty in line with standard online shopping. But then it was shipped back to the warehouse, where it was laundered and then shipped out to another customer. Then back to the warehouse, back out to another customer, etc etc etc. This is a lot of transportation and a lot of fuel and emissions for ONE DRESS.

This could change if rental companies started delivering all of their orders via electric vehicles, but that would really mean that the shipping carriers like USPS and UPS would have to shift their fleets. So that’s out of control of the rental companies.

Furthermore, the amount of times a garment is rented/transported could be reduced based on the model of service the rental companies offer. For example, for years Rent the Runway offered an unlimited plan, meaning that customers could wear something once, send it back on its own, and order something to replace it in the next few days. I want to say that service gave the customer the opportunity to have 4 garments in rotation at all times, and most customers wanted to get the most out of their subscription (there was a lot of talk of reducing the “cost per wear” which meant renting as much as possible. So the typical Rent the Runway customer would have 1-2 items at home, one on the way back to the warehouse, and another on the way from the warehouse to their home AT ALL TIMES. On average, customers were receiving 16 garments per month–sometimes more depending on where they lived, shipping times, etc–but that would mean 32 deliveries back and forth each month. That’s a lot of rides in trucks!

In the early months at my rental job, the burgeoning rental industry was getting a lot of press. And of course we devoured it at work because our project was for the most part top secret. Very few people on our own corporate campus knew what we were working on! There was one article that made the rounds of our tiny team (and was dissected in great detail). I haven’t been able to track it down, but it has stuck with me for years. There was a Rent the Runway customer who lived in New York City. Customers in Manhattan had the option of dropping off their items at special drop off spots, which sped up the entire turnaround of new items. And this customer was making daily visits to the Rent the Runway drop off location in Soho so that she could have a new item almost every day. Yes, this customer felt that she needed 25-ish new items of clothing each month. And she mentioned how she was “rekindling” relationships with old friends/acquaintances who lived near the Rent the Runway drop off location so she could use her time more efficiently by working socialization into her clothing obsession.

I think this is a great moment to talk about the financial model of rental. Like, how does a company make a profit off of renting clothing?

Launching and running a rental company is not cheap. You can’t just start a rental service without a ton of capital. In fact, Rent the Runway has received about $400 million in venture capital over the years. The company also went public in October 2021. But guess what? Despite all of that money flowing in, Rent the Runway has never turned a profit. LeTote has also never been profitable.

So what do you need to start your own rental company?

A laundry facility, including industrial washing machines and dry cleaning equipment, as well as machines to steam and press clothing.

Sewing machines and other repair equipment

A huge warehouse space for storing all of the clothing.

A technological infrastructure that allows you to track where each garment is. If you’ve ever rented clothing, you’ll notice that each garment has a tiny barcode, often attached to the brand label. That’s the unique item number for that garment, allowing the rental service to scan it and track it along its journey through the warehouse, out to the customer, through laundry, and back into the warehouse. Those barcodes, the system that tracks them, and the equipment for attaching those barcodes…well, that costs some major money, too. It goes without saying that you’ll also need a good website, with good functionality that connects to the warehouse inventory, so customers can always get up-to-the-minute accurate information about what is available to them.

You also need a huge staff for receiving, sorting, cleaning, barcoding, inspecting, and shipping clothing. The flow of clothing in and out of the warehouse is complex, with a lot of touch points along the way. A new garment is received, unpacked/unwrapped, barcoded, hung, and then added to inventory. A worker finds each garment in the warehouse to pack an order, while another worker packages up the order and ships it out. Meanwhile, other workers receive the returned rentals. They scan them back into the warehouse, sort them by laundry needs, and send them over to the laundry team, who washes, dry cleans, presses, steams, etc. Then the items go to inspections, where more workers inspect for any quality issues like holes, pilling, missing buttons, broken zippers, and stains. All the things that can go wrong with clothing. If an item needs more laundry assistance or repairs, it is sent off to the repairs department. If an items passes inspection, workers move it to the warehouse, where it will hang until the next time it is rented. That’s a very simple version of the process, and yet, WOW, so many workers needed to do those jobs! That costs money! Imagine a model like Rent the Runway’s Unlimited plan, where stuff is just constantly moving in and out of the warehouse. That’s a lot of workers!

You also need inventory. And a lot of it, with steady newness arriving. Because the thing about rental (just like regular shopping) is that customers are always looking for something new and trendy. So you need to have new arrivals constantly. And what if you already had access to brand new inventory at the cost of making it, rather than the much higher (usually twice as high) cost of buying it wholesale? That could make this a lot more affordable…

Which is why fast fashion retailers are at an advantage for starting their own rental platform because they often have the capital to make the investment in laundry facilities and technological systems, along with access to super cheap new clothing. Once again, rental is a great way for fast fashion brands to keep their hands in their customers pockets without having to make any larger systemic/ethical changes. And sure, they’ll have to invest in all of this stuff, but it will protect their business from any declines in business when we all get sick of fast fashion.

But that said…how does this kind of business make a profit? I’ve already told you that no one is making a profit yet.

In a standard retail model, the retailer buys the product for a cost, sells it at a much higher price (that’s the markup) and pockets the rest in profit…well, that’s a simplified version, because that profit is called “gross margin dollars” and they use those gross margin dollars to pay for all of their expenses like employees, offices, equipment, stores, warehouses, advertising, etc. But then what’s left is the actual profit.

This model of making profit is pretty straightforward. Lower your expenses by paying people less and negotiating lower costs on the items you’re selling, and you’ll make more profit.

But in the world of rental, that’s not how it works. Now I will tell you this: rental platforms (all of them) offer the option of buying the clothing you’re renting, often at a discounted price. And if the company has a good algorithm in place, that price will be unique to that garment and its history: how long it has been in stock, how many times it has been rented, its popularity, etc. Fun fact: a garment that has been rented 100 times might be more expensive to purchase than something that was rented just a handful of times BECAUSE it is so popular. Kinda surprising, right?

Selling clothing to customers is part of the financial model of rental and it’s definitely a lever that rental services pull when they need to free up some cash. So suddenly they will offer everyone a bigger discount that they cannot resist. But if they are running into inventory shortages, they take a different approach. This happened with Rent the Runway a few years ago when they brought in way too many subscribers without enough inventory to keep them happy. To hold on to every last garment, they reduced the “discount” to just a few percent, in an attempt to discourage purchasing. It’s important to mention that in much of the research I’ve done, a decent chunk of customers admitted to purchasing just about every item they rented, which is pretty concerning. Buy 5 or 6 items every month (that’s what most of these services offer in their standard subscription package) and soon you’re buying 60-72 new garments each year. That’s exactly what we’re trying to avoid here!

So yes, selling clothes is a small part of the financial model here, but the major source of money is subscription fees. And to a certain extent, the amount of money you will have coming in each month/year is pretty predictable. Set a target of subscribers you expect to have each month or year. Plan that a few will quit here and there and set goals for new subscribers. Of course, that can go off the rails if you have a global pandemic and no one goes anywhere for a while or has the money to rent clothing. But in general, it’s a safe bet that if you offer decent service and enough choices for customers, you’ll be good to go.

Now come the expenses: employees, laundry chemicals, energy and water bills, and most importantly: all that shipping. Rent the Runway had to discontinue their Unlimited service because they were bleeding money on all that shipping. Overall, all of these expenses are kinda non-negotiable and while you could tweak them a little bit, there’s not a lot of opportunity to reduce them. You could buy laundry chemicals in bulk and save a few bucks. You could pay employees as little as possible, but there are laws soooo….you’ve got to reduce costs on inventory. Meaning that you want to buy clothes as cheaply as possible, which means, you’re going to buy fast fashion clothing as much as possible. You’re going to ask brands to switch into cheaper fabrics and trims to keep costs down. Maybe you’ll keep some fancier brands in stock to keep customers on the hook, but those will be a tiny part of your overall inventory. Put a pin in this idea of fast fashion clothing because we’ll be coming back to it. Trust me, it’s a decision that will come back to haunt these rental companies.

The financial model of rental says “okay, we’re going to have this many customers…and they’ll be paying this much every month to participate. After all of our operational expenses, we have this much money left.” Now you might think, okay, all of that money can be spent on inventory. But of course, the rental company needs to make some profit. Or at least have some money leftover to pay off the loans they took out to build that warehouse and buy those laundry machines. So, it’s up to someone to determine the bare minimum number of garments required to fulfill customer expectations. And reaching this number is part science, and part art! Let’s say you have 50,000 customers each month. They each get to rent 5 garments. Well, that’s 250,00 garments required to meet the demand. But customers need options and sizes. . So maybe you want to have 10 garments available per subscriber. So that’s a total of 2.5 million items. And while that sounds like a lot, I almost don’t think that’s enough. I think customers could be disappointed. And subscriptions are shipping in and out of the warehouse all through the month, so you might want a little extra.

But let’s say 2.5 million items is the number that you have to keep in stock all the time. You’re going to want to account for the items that are bought every month and therefore, go out of circulation. And of course there are garments that will be damaged/unwearable or lost by the shipping service. You already know that you have to bring in new items every month, too. So modeling all of this will require an assumption. And that assumption is “how many times will each item be rented (on average).” This number will change over time. Maybe you’ll think 12, so a garment can be rented out for a few year (on average) before being retired. That means some things will be rented 20 or 30 times, while others will be rented once or twice before being damaged beyond repair or purchased. And then you’ll hit that average of 12 rentals. The thing is every time a garment exceeds 12 rentals, it becomes more profitable. When it’s rented only once or twice and then has to be damaged out, it becomes less profitable. In a good situation, this will motivate a rental company to repair every item and remove every stain. From what I have read–and I take this with a grain of salt–Rent the Runway is fastidious about repair and stain removal because it wants to get every wear out of a garment as it tries to become profitable. Other companies care less, mostly because they are buying clothes so cheaply in the first place. And that’s too bad, because I think rental has a place in the circular economy, but with some caveats in place. We’ll get to that…

I think it’s important for us to examine all of the ways in which rental offers the illusion of sustainability but probably isn’t delivering it.

First, of course there is all of the transportation, delivering the orders back and forth. However, like I said, there are ways to mitigate this, via electric vehicles, creating hubs for drop off and pick up that would require less delivery vehicles out on the road, and slowing down the rental process, eliminating all services like Rent the Runway’s Unlimited plan. Furthermore, rental companies just bleed money on shipping (because they cover each trip to/from the warehouse). If they could reduce shipping costs, they could probably pay their warehouse workers better AND buy more high quality/long lasting, truly sustainable/ethical inventory.

Next, as I’ve already mentioned, most of these rental services are renting out fast fashion clothing, meaning that they are supporting an industry that exploits workers and wastes resources. If rental ever gets as big as industry experts have been speculating, rental would be propping up an industry that doesn’t deserve to be supported! This drive to buy fast fashion inventory goes back to the financial model. Since it’s difficult to cut expenses like laundry and shipping, these companies focus on cutting the cost of the clothing, making fast fashion brands and vendors just too enticing! It’s disappointing that they aren’t taking the longview of buying higher quality clothing that will last longer and therefore be rented many more times. But I can’t help but think that’s part of a larger quandary for rental services that really starts with the customer: customers want new stuff all the time. Occasionally they will rent the same thing more than once, but unfortunately our brains have been fast fashion-ified, too. We want something new all the time. We don’t want to wear the same thing for multiple events. We want a new outfit for every instagram post. And it doesn’t help that rental services have swooped in to say to us “hey, we’re going to let you continue that behavior, but we’ll make it ‘sustainable.”

As you know by now–but I’m going to repeat this for any new listeners–in the past decade just about every large brand and retailer has adopted the fast fashion model of doing business: over production, overconsumption, and exploitation. So even on a high level, the majority of brands on most rental platforms will be fast fashion. Rent the Runway ostensibly curates a higher end offering, but to be honest, there are some obvious fast fashion brands working their way in there, along with some fancier brands that probably operate using the fast fashion model, too. LeTote, a less expensive option, is completely fast fashion brands and suppliers.

But does this drive to cut the budget for inventory by renting out primarily fast fashion brands bite the rental services in the butt AND make the whole model less sustainable? The answer is…well, yes, definitely!

Often the fit and quality aren’t great, so customers are disappointed and end up buying more new clothing anyway, defeating the whole purpose of rental in the first place! Or they ask for replacement garments, which are shipped out and therefore, increase the carbon footprint of the whole thing. And this costs rental services more money on the shipping side.

Often these clothes are made of synthetic fabrics because they are more stain resistant and hold up better to washing. Most rental companies try to avoid natural fibers because they might shrink, they get wrinkly (so they need pressing, which means you need to pay someone to do that), and they can stain more easily. In fact, one thing I learned very early on in my brief career in rental was that even the fancy rental services like Rent the Runway were asking brands to produce versions of their lines in polyester because the fabrics held up longer and were less expensive. Of course there are major drawbacks to this. These fabrics are made from oil, they are not biodegradable, and they shed microplastics when they are laundered.

There’s another variable to take into account here, and it’s one that bummed me out over and over when I was working for that rental platform: customers don’t treat these garments with care. I could not believe the state in which many of these clothes returned to our warehouse. Covered with BBQ sauce and drenched in rosé, missing buttons, with gaping holes. Sometimes shrunken to child size. It was as if a big chunk of our customers belonged to a parkour club whose regular meetups ended at a wine bar with a bbq buffet. Occasionally a customer would decide to cut a pair of jeans four inches shorter or a crop a tshirt…that they did not own! So many things were damaged beyond repair. But others could be fixed.

Here is the catch: it’s expensive to repair things and remove stains. You have to pay someone to do that, right? So if a garment wasn’t that expensive in the first place. Like let’s say it was a dress that cost $12 (yes that really happens). And the zipper was broken. You could have one of the staff seamstresses fix it, but it would take about an hour and they are paid $20/hour. Suddenly you’re spending more money on repairing this garment than you actually paid for it. If you’re running a rental company because you’re into sustainability, then it’s a worthwhile expense. But if you’re running this company to get rich or pay dividends to shareholders or make up for lost sales at your fast fashion parent brand…well then you’re going to toss that dress out and replace it with another $12 dress (and save $8).

Once again, rental companies are looking to keep costs as low as possible, especially when it comes to the clothing they are renting out. They could do that by buying less new stuff and offering the same items for longer. This would allow them to invest in higher quality, longer lasting garments. But remember: they are selling the illusion that we can continue to have tons of new clothes all the time, all without the pesky guilt of buying them ourselves. To keep that illusion going while still staying in business, they are substituting cheaper fabrics/trims on more expensive brands, and buying into more less expensive fast fashion brands too. And this stuff–as you and I know well–doesn’t stand up to a lot of wear.

Here’s where all of this starts to really break down. Obviously some stuff gets damaged on its first rental, and other stuff gets rented 20 or 50 times…but it still means that on average, these clothes aren’t getting worn more times than you would have worn them if you owned them and were adopting a more circular model of wearing things over and over again, mending them, caring for them, and then thoughtfully rehoming/reselling them when you were done with them.

Lots of stuff gets damaged (holes, rips, runs, missing buttons, and broken zippers), and it’s “too expensive” to pay someone to fix it. The same goes for stain removal, pilling on sweaters, things that somehow get smelly in a way that laundry can’t fix (yes that happens), and as I already mentioned, people sometimes wash and shrink garments while they are renting them.

The industry isn’t required to report the amount of product they are damaging out, but I want to assure you that it is a surprising amount, especially for the rental brands that focus on more day-to-day clothing, mass brands, fast fashion brands. This is why all of the platforms–includingRent the Runway– are getting into the resale/secondhand game because they want to recoup the losses of all of that damaged product.

Next, let’s think about all of the laundry! Most of these rental services use a mixture of dry cleaning (which btw is terrible for the planet) and wet washing (literally massive industrial washing machines and detergent). They clean every single garment when it comes back, even if it was never worn. That’s what they have to do. So lots of chemicals and water get wasted.

Furthermore, it’s up to the workers who receive the returned rentals to sort them for various wash cycles and dry clean processes, to ensure that more garments aren’t damaged. But guess what?? Mistakes get made a lot. Like a lot. I know that Le Tote damaged a ton of inventory a few years ago by overfilling washing machines. Their inventory wasn’t sufficient to meet subscriber demand, so they were trying to move clothing through the laundry part of the process as fast as possible. I saw people complaining about receiving clothing that had shrunk, bled, or lost its shape because LeTote continued to rent out these damaged clothes. Oh yeah, this is a good moment to mention that part of my research (both for my job in rental and this episode) was joining lots of Facebook groups and subreddits for people who rent clothing. I also saw Rent the Runway having similar laundry and repair issues a few years ago, when their subscriber base was exceeding inventory availability. Customers received dirty, stained, shrunk, damaged clothing because the company was trying to push items through the process too fast.

There’s a ton more we could cover in this episode if you all ever want a part two on rental (let me know if you do): we could talk about how Rent the Runway treated its workers in the early days of Covid (spoiler: badly and recklessly), we could talk about the impact of the pandemic on rental (although it’s rebounding) and we could talk about how LeTote is suing Urban Outfitters for stealing its proprietary secrets to launch its own rental platform, Nuuly (the allegation is that Urban Outfitters expressed interest in purchasing LeTote, did weeks of due diligence research that included learning about all of LeTote’s systems and processes, then backed out at the last minute, launching their own rental service instead). I’ll share some links in the show notes for you to read about all of that. And maybe we can do a follow up episode or an instagram live where I can discuss those items with you.

My own experience working in rental was pretty traumatic. Like some really bad stuff happened to me at the job that I’m still coping with. It was a very toxic, dysfunctional culture. And working on this episode definitely dredged a lot of that back up. I woke up in the middle of the night last night and found myself running through all of the messed up stuff I witnessed and experienced at that job. I felt angry, sick, and sad. But I’m glad that I had the experience of working in rental. It taught me even more about how the clothing industry has changed for the worse, how rental is and how it could be, and most importantly, it was a big lesson in greenwashing (and spotting it).

But now that we’ve spent THIS time together discussing rental and breaking down how it works, it’s time to answer our question: is rental a sustainable option? Notice how I didn’t ask “is rental the MOST sustainable option?” Because we already know the answer there is “no.”

Here’s my biggest issue with rental: It only continues to reinforce that stale, consumerist idea that we need to wear new clothes all the time, especially for every instagram post or wedding or birthday or picnic. It says that we need constant newness and we need to participate in every single trend. Rental encourages us to always want more more more and new new new. Especially as more rental services have popped up to provide us with day-to-day clothing, whether it’s sweatpants, jeans, work clothes, workout clothes, you name it.

The only sustainable way forward is true circularity, aka slow fashion. It means buying fewer brand new clothes, shifting to a secondhand first mindset, and wearing things over and over again. It means caring for your clothes to make them last as long as possible for you and for the next wearer. It means mending and stain removal. It means being a proud outfit repeater! And it means thoughtfully rehoming our clothing when we no longer can or will wear it.

Do I think rental has a place in our lives? Sure!

I think renting special occasion clothes is a great idea since we wear them so rarely! Listener Iris (hi Iris) told me a while back that it is very common to rent a wedding dress in Mexico and I think mainstreaming the rental of wedding and bridesmaid dresses is GENIUS.

If you have a job where you have to wear professional clothing and you don’t have any of that kind of stuff, then rental is a great option for you, too!

If you need specific clothes for a trip (like you live in a warm place but are traveling somewhere cold where you’ll need a proper winter coat or sweaters), rent them!

I think renting maternity clothing is an amazing idea, too

But I don’t think you should be renting regularly, I don’t think you should be getting new clothes all the time, which is what rental offers you.

But also…maybe you don’t need to rent any of these clothes. Because maybe you can borrow them from a friend, family member, or neighbor. Dustin and I have been rewatching Mad Men and one thing that has struck me is how often I see women loaning one other clothing on that show. I love that! The other thing that has struck me is what a toxic character Don Draper is (even if he is sexy) and I’m concerned that I didn’t notice that on my first viewing. That’s a whole other podcast, but if I had all the free time in the world, I would have a podcast about Mad Men, another about 90 Day Fiance, and a third about Rock of Love. Oh and there would be a fourth podcast about The Doors film (directed by Oliver Stone) which I have seen no less than 50 times because I always watch it when I’m sick. I don’t know why.

But back to rental: ultimately rental has achieved a level of success because it promises us that we don’t have to make a change in order to save our planet. And you know what? That’s just not true. We’re all going to have to make changes in our habits, our society, and our larger economic systems. But we’re here to do that, right? I know that change sounds scary, but it oftens feels really great when it happens. Rental can be a part of a circular economy, but it has to change its motivations. When your mission is profits over everything else, things get muddled and mixed up. I know that a sustainable, ethical business model can be profitable, but it’s going to look a lot different than anything we see right now. I also think changing the way our society looks at clothing, all of our behaviors around stuff and style and new stuff/style…that’s all going to have to change alongside it. But it can happen. It WILL happen, if we’re all in this together. Okay, get out there and wear something that you’ve already worn many, many times before!

There was a time…we’ve talked about it here before…when it was just so easy to sell stuff to people. I’m thinking like 150 years ago, maybe even 100 years ago. If you had it, people would buy it because there weren’t very many places to buy things. Everyone shopped local and small, because that’s just how it was. Sure, most shopping involved bartering and haggling (and that sounds like a nightmare to me), but most people made their clothes and other household items. And a shopping spree was more like the beginning of the Oregon Trail game, where you just stocked up on oxen, wagon axles, and rations. Or something like that…regardless of how accurate the Oregon Trail game was or was not, shopping wasn’t a past time. No one was listing it as a hobby on their OK Cupid profile, mostly because neither the internet nor internet dating existed. And making a hobby of shopping would have been even more depressing than it is now.

The department store arrived on the scene in the late 1800s, as the Industrial Revolution changed the way many people lived. More people left rural areas and began to work in factories and shops. People made less of their stuff because they were too busy working for someone else. So more shops opened to serve them. At the same time, gift giving became more of a thing. The department store–these “palaces of consumption” were the first place where one could spend a whole day shopping. They housed everything under one roof: from clothing to fragrances to candy and foods to gloves and books and home goods…it was all there, contained within these buildings that were as ornate and beautiful as the most celebrated churches and cathedrals. As I talk about this, I’m getting so sad and longing for the thrill of a fancy department store, versus the ones with stained carpet and empty racks that we’ve seen for so many years now.

Back then, the department stores were INNOVATIVE at selling stuff, at making things more appealing to customers. For one, the prices were fixed. There was no haggling for a new pair of silk gloves; one simply paid the price on the tag. The idea of “the customer is always right” was born, creating headache upon headache for all of us who have ever worked retail. The concept of “satisfaction guaranteed..or your money back” was also new. Yes, most stores did not have a return policy before the rise of the department store. And these department stores were innovative in the way they tricked customers into spending long periods of time within the four walls of the store, with cafes and nap rooms, reading rooms and art galleries, rooftop gardens, musical entertainment…one could shamelessly spend an entire day inside a Macy’s or a Selfridges.

The department stores lent a level of prestige and reliability to shopping. And when it was time for the world of retail and shopping to evolve into its next incarnation, department stores were a key component. Yes, the mall arrived on the scene. The department stores–in their prime “anchor” locations–brought people to the mall. And into the corridors between department stores, where they found specialty retailers like the Limited and Gap. And that’s how THOSE “specialty” retailers became the latest innovation in retail. Rather than serving everyone/everything as the department stores aimed to do, these retailers focused on a specific audience whether it was teenagers (Express), young women (Limited), young men (Structure), or children (Gymboree). Was your style more classic and casual? Go to the Gap. More preppy? Check out J. Crew.

There was a brand for everyone (as long as they landed in one of a few basic boxes). And customers liked this. They felt special. They gained a sense of identity. Is it sad that people base their identity around brands and retailers? Sure, but we know it happens even now. But it all began in this era. The innovation was identity! These specialty retailers soon eclipsed the department stores. By the 1990s, department stores felt old and stale. Brands like Limited, Abercrombie, Victoria’s Secret, J. Crew, Gap, Urban Outfitters…they became powerhouses that launched several brands under their vast umbrellas. It seemed that soon they would take over the entire mall.

But then the 21st century arrived.

And two things arrived on the scene: ecommerce (aka, shopping online) and fast fashion.

The department stores were so late to the game when it came to ecommerce, they never caught up. They were officially dinosaurs. We saw one department store after another declare bankruptcy, reorganize, and sometimes, disappear completely. The specialty brand megacorporations were still going strong, but after the 2008 financial crisis and the subsequent recession, they saw more and more of their customers opting for Forever 21, H&M, and Zara. These fast fashion retailers allowed customers to buy a lot of stuff for the same amount of money that would get them MAYBE one item at the specialty stores. Who was the dinosaur now? Retailers raced one another to the bottom in terms of pricing and deals. Then they competed to sell every trend before everyone else. That was where the “fast” part of it came into play. You know this story because you’ve been listening to Clotheshorse, so I won’t belabor it.

But by 2018, retailers could see the writing on the wall. It was harder and harder to compete with the fastest fast fashion retailers like Zara, who were literally finishing the garments on boats sailing across the Pacific, just so they could get clothes into the hands of customers even faster. Meanwhile the so-called “specialty” retailers no longer seemed to have a special niche at all. Lower and middle class people looked to luxury brands for identity. They weren’t getting that from the Gap. And the fastest fast fashion was there to fill in all the voids in their shopping routine. Ironically, retailers like Zara would find themselves feeling antiquated and threatened by 2020 or so, but that’s not what this episode is about. No, this is an episode about something else. This is an episode that begins in late 2018, when the big retailers, by now fast fashionified and flailing, were looking for a new way to rake in those profits. And there was a new idea emerging, something that had been around for a few years in a specialized way, but was prime for a wider presence. Customers had eco anxiety. Simultaneously, they were addicted to a steady stream of new clothes and new reasons to buy new clothes. Where was the delta between eco consciousness and a new outfit for every instagram post? Clothing rental. Finally, a new way for these worn out, slightly panicked retailers to cash in…by adding clothing rental to their business. What could go wrong?

Welcome to Clotheshorse, the podcast that derives a strange amount of joy from explaining complicated things.

I’m your host Amanda. And today–in this special “you only get to hear me talk” episode, I’m going to break down clothing rental. We’ll try to answer the question “is rental a sustainable option?” LIke a lot things we discuss around here, it’s complicated. That’s why it is a whole episode!

So before we dive in, I have to give you a bit of a disclaimer:

Remember that job I lost during the pandemic? You know, the one that let me go early in the pandemic, gave me two weeks of severance, and cut off my health insurance just a few days later? My employer was a new rental service that launched in mid 2019. In addition to literally picking out the entire launch assortment/onboarding the brands, I also did a ton of industry research in the early months of the brand (before it launched) as we worked as a team to figure out the best product to buy, what people liked to rent, how our competitors worked, and of course, how we could do better.

I’m not going to talk about my specific experiences at that job because of course they made me sign a severance agreement saying that I would never publicly nor privately say anything negative about the company. Instead, I’m going to be speaking to the research and conversations with vendors/other experts I had in that pre-launch research period. I’ll also be talking about things I learned after I lost that job via all sorts of research and reading. I will say this:

I came into the rental industry with the idea that it was more sustainable. In fact, it was the sustainability angle that made it an appealing position for me. My job before that had been my worst job ever, working for a very toxic “feminist” retailer in the Pacific Northwest. After I left that job, I was coping with a lot of PTSD, just completely decimated self esteem, and I was exhausted. I vowed that I would never work for any other company ever again. But then this company reached out. They knew my work well, they knew about my quote “legendary” taste, and they wanted to talk to me about this new, sustainable approach to fashion. I love style, I love helping people feel their best, and I’m obsessed with the planet…I thought that rental was the right path. Perhaps finally I could find meaning and purpose (outside of collecting a paycheck) from my career! So I took the job. Dustin and I packed up our cats, houseplants, and weird vintage possessions, and we moved across the country to Philadelphia, Pennsylvania.

It was a big and scary move. I had a lot of reservations about the whole thing, but the idea that I could be a major part of a new, sustainable movement…well, that made it all worthwhile.

Pretty rapidly I realized everything I thought I knew about rental was wrong. And I realized that the rental industry was riding a huge wave of greenwashing.

Let’s recap what we know about clothing consumption in this decade: in the last 15 years or so, the global production of clothing has doubled. Meanwhile, the average number of times garments are being worn has decreased by more than a third. And on average, Americans buy 70 new articles of clothing each year. And yes, that’s an average so if you’re sitting there saying “I’ve been wearing the same clothes since 1995,” and therefore, bought zero new garments last year…well then that means someone else bought 140 garments. That’s a simplification of course, but it’s an important illustration of where clothing consumption is right now. If 70 is the average, then there are just as many people buying more than 70 garments as there are people buying less than 70 garments. Shopping has become a past time for some and a mere habit/routine for others, but no matter how you slice it, we have become very accustomed to wearing a new outfit as often as possible. Influencers, social media, and retailers as a whole have created and reinforced “rules” around wearing something new for every event, every photo, every day of our lives. The concept of “outfit of the day” has never been about wearing your favorite outfit again and again on different days, it’s been all about wearing a whole different outfit (accessories and shoes included) as often as possible. Many people consider an outfit “old” if it’s been worn more than a few times. Yes, we have social media to thank for this. I like to imagine that fast fashion has been sending a steady stream of Edible Arrangements to Instagram world headquarters as a “thank you” for all of the sales the app has indirectly (and now directly) driven over the years.

Yet, for all of our addiction to new clothing, none of us are monsters. We care about the planet. We care about its people. Heck, we are the people of this planet. And we don’t want our clothing to destroy it. Yet the thought of changing our habits, of wearing less new clothes, of possibly being “cheugy” or “not put together” or whatever it is that we’re all worrying about…well, we are scared (or at least highly reluctant) to give up the lifestyle of clothes, clothes, and more clothes.

Well, rental is here to save the day. Or at least, that’s been the message for the past few years. Clothing rental began with a focus on special occasion wear (we’ll get into that) but as retailers saw a new revenue stream, a way to hold on to some more profit…it began to take on new form “wearing new clothes every day, for every occasion.” Never ever have to change anything on your end while minimizing your impact on the planet. That sounds pretty great, right? In fact, it kinda sounds…too good to be true, doesn’t it?

Last summer, a Finish study published by Environmental Research Letters shocked everyone in the sustainability community.

It tracked five different ways of consuming a pair of jeans…I want to say that I appreciate the choice of jeans for this study because jeans consume a lot of water and chemicals to create. I do not think it is hyperbole to say that jeans may be the most impactful garment we wear when it comes to energy and water consumption, water waste, and overall impact on the workers making, dyeing, and distressing our jeans and/or living near the facilities where all of this happens. Go check out the series of Clotheshorse episodes about denim with denim designer Michelle from the very early days of the podcast!

So back to this study…it examined five different ways of consuming a pair of jeans:

Wearing them and then throwing them away;

wearing them for longer than average before throwing them away;

reselling them;

recycling them;

and renting them.

In each scenario, they calculated the “global warming potential,” which refers to how greenhouse gases are emitted throughout the lifecycle of the jeans. They considered everything from manufacturing and transportation to washing and disposing of them.

The big shocker here was this finding: Renting clothes had the highest climate impact of all—even higher than just throwing them away.

I also just want to add here that recycling clothing–the actual act of disassembling clothing and using machines, chemicals, energy to turn it into materials/fabric/clothing, also has a very high climate impact because it involves a lot of transportation, water, energy, and chemicals…and even worse it creates the ILLUSION of a guilt free way to buy tons and tons of clothes, wear them a few times, and then dispose of them. Anna Härri, one of the co-authors of the paper, told Fast Company, “Recycling is an important part of a sustainable future. We encourage companies to keep investing in it. But it cannot replace reducing consumption.”

The way we have been consuming clothing in the fast fashion era will never ever be sustainable. Going back to that average of 70 new garments each year: that’s a new piece of clothing every five days. Do we really need to acquire something new that often? Ultimately, this study, along with so much other research, has indicated that there is only one path forward for reducing the impact of our clothing and that is (surprise, surprise) wearing your clothing longer/more often, shopping #secondhandfirst, and reselling or thoughtfully rehoming your own clothing when you are done with because it no longer fits or your life has changed, or YOU have changed. No one is expecting you to wear the same clothes your entire life, or wear ugly, ill-fitting clothing that you hate. You don’t have to give up expressing yourself via your wardrobe. But there are smarter, more sustainable ways of doing that. But of course those ways involve changing up our habits by changing the way we shop and WHERE we shop.

And these two things frighten the fashion retailers who are part of an entire industry built on overproduction and overconsumption.

The industry knows that it has a major problem on its hands, and while I’m sure there are many individuals working within who see the “environmental writing” on the wall, there are many more in the industry (mostly at the top) who are focused on a different kind of “writing” and that’s the in their P&L statements: as (or more like “if”) customers truly care about sustainability and make these changes in their habits and where they shop, sales of new clothing will decline sharply. And the majority of retailers are already feeling the squeeze of the fast fashion era, of oversaturation, of players like SHEIN who promise ridiculous amounts of cheap trendy clothing on demand, at rock bottom pricing.

This is why greenwashing exists and why we are seeing it become the norm, rather than the exception in brand marketing. Let’s take a moment to review the definition of “greenwashing;”

It is the strategy of conveying a false impression(or providing completely misleading information) about the environmental impact of a product or a brand. It is an unsubstantiated (meaning: unproven) claim of “eco-friendliness” that creates the illusion of guilt free consumption. The goal here is two-fold: create a sense of responsibility and ethics in a profoundly unethical and reckless industry and convince you to buy a little bit more because the things you are buying are magically “good” for the planet.

I’m not going to go too hard into greenwashing here because we’ve talked about it ad nauseum here on the podcast and on social media. But I do want to remind you of one of the most common greenwashing strategies: co-opting words that are essential elements of the sustainability movement and using them in bad faith to mislead consumers. “Sustainable” is actually a great example of a word that has been essentially ruined by all of the inaccurate, misleading ways it has been used by many industries.

Another concept/word that is being used more and more as a retail buzzword (rather than its true origins as a model for a sustainable, ethical economy) is “circularity.” See also “circular fashion” and “circular economy.”

Right now much of our economy (including the fashion industry) is linear: Raw materials are used to make clothing, we buy and wear them, then we toss them in the trash. Sure, some of those clothes get reworn, but not that many. And furthermore, we have been moving through the points on this line much faster over the last 15 years as we wear clothes less often before tossing them.

The circular economy requires keeping clothing in circulation for a lot longer. They are created, we buy them, we get the maximum amount of wear out of them before passing them on to the next wearer, via resale, thoughtful rehoming, upcycling, etc. When these clothes have given all they can to the world, they are recycled into new clothing, reducing the need for new material creation.

The industry has a few problems with the true, genuine circular economy. For one, fabric/material recycling just isn’t “there” yet, because for so long, it’s been cheaper to make brand new materials than recycle existing ones. So no one has been funding recycling technology–especially textile recycling technology–in any meaningful way.

Next (and this is the big one) the industry in its full fast fashion-ified glory cannot exist without overproduction and overconsumption. So if we wear our clothes longer, if we shop secondhand…what happens to the industry? How do all of these brands and retailers stay in business?

Let’s talk about that for a moment, because I get this question a lot. And while I’m sure sometimes that question is asked in a good faith way, like generally wanting to know what happens when we stop buying so much, I often feel that it is being asked in a bad faith way as a defense of overshopping.

Okay, so what happens if we buy less? Well, some businesses may go under. Or at least scale back. At least initially. And yes, people will lose jobs. Garment workers may lose jobs. Let’s think about that.

Right now the industry is built upon producing (and buying) a ton of stuff at the lowest prices. The conceit being that if you need a lot of new clothes all the time, you need them to be as cheap as possible so you can afford to buy them.

But what if we needed less new clothing? And we wanted it to stay “in the system” longer? Then clothing could be more expensive. It would have to be to make it higher quality and longer lasting. No more plastic zippers that break two wears in, right? One of the aspects of the “as many clothes as possible, as cheaply as possible” status quo is that factories (and therefore workers) have been squeezed on pay to keep those prices low. And it’s not just the workers making our clothing, but also those making the fabric, dyeing/printing it, creating the trims like zippers, buttons, labels, and so on. Everyone has been paid less and less. Retailers have shifted their supply chains to countries that regulate labor less and have a lower minimum wage (if one at all).

To be clear: while garment work is skilled labor and the work itself is important and essential, it is not a good job. We’re talking 12-14-16 hour shifts, 6 or 7 days a week for low wages that could never qualify as a “living wage.” We’re talking dirty bathrooms, abusive conditions, and wage theft. In some cases, we’re talking about forced labor and child labor. All to keep prices low low low (and super profitable for the select few at the top of the industry). This is not a “good job.” Fast fashion has not done a favor to garment workers. These human beings work and work, with little to show for it. They still live in poverty.

Once again, as consumers we are (perhaps accidentally) giving our consent to this abusive, exploitive system because we expect low prices. But what if we weren’t so hung up on that because we didn’t need a steady flow of new garments? What if they could be twice as expensive? So rather than expecting a dress to be $50 so we could buy many of them, we would be willing to pay $100 or even $150 because we would be buying significantly less new dresses?

What if garment workers could be paid a living wage? TBH, most experts say paying a living wage to garment workers would only raise the prices we pay for something by 1-4%, but imagine if we could do better than that? And yes, with less clothing being made, less people would need to make it. But maybe they could be working in the textile recycling industry. Or what if they didn’t have to deal with clothes at all and instead could become teachers, writers, activists, artists, stay at home parents, interior designers, musicians…the list goes on and on. Why do these people have to expect that “garment worker” is the best they can do?

The world would change if we bought a lot less clothing, and in so many ways. Shutting down the industry for a year would have the same impact as grounding all international flights and stopping all maritime shipping for a year. I’m not suggesting that, but instead I’m saying “what if we cut the production in half?” Going from 100 billion garments each year to 50 billion. That’s still plenty of clothing.

The thing is…this kind of change is scary for retailers because overconsumption is built into their model. It’s hard for them to see a way out of it. And (especially for the publicly traded companies) reduced sales and profits is a hard pill to swallow.

So here comes the greenwashing of circularity. Rather than making true efforts toward reducing the impact of the industry, brands are co-opting elements of the circular system and turning them into marketing stories. Like, instead of truly investing in development of clothing recycling technology, they are bragging about the small percentage of recycled fibers used to make a garment (never mind that the majority of the fabric is brand spanking new fibers). Or rather than shifting their entire supply chain into processes and equipment that use less water and energy, they are bragging about one collection where the production of a few pieces uses less water. And of course, they are never talking about the workers involved in any of this.

Rental (and now secondhand) are part of this “circular-washing” that retailers are doing. Rental and secondhand are a great way to keep their hands in their customers pockets without having to make any larger systemic/ethical changes. Losing a customer on the “brand new clothing” side of the business? Move them over to the rental side and continue taking their money. Or even better…make a profit selling them new clothing, then take another cut when they resell the clothing they bought from you on YOUR resale platform.

By the time I took that job for this new rental platform in 2018, the rental industry was getting a lot of buzz in both the business and fashion press. Renting clothing is nothing new: renting formal wear –specifically suits and tuxedos–has been around for a very long time. Some of us have rented uniforms for work. In 2004, Lloyd Lapidus and Greg Pippo (two friends who definitely did NOT have a background in fashion) launched Bag Borrow or Steal, a service that rented luxury handbags, sunglasses, jewelry, and other accessories. You might recognize this service from its cameo appearance in the first Sex and The City film, where Jennifer Hudson shows off a steady stream of rented designer purses.

In 2009, two Harvard Business School graduates, both named Jennifer (Hyman and Fleiss) launched Rent the Runway. I won’t go too much into that story because it’s often tossed out there as a #girlboss success story, and you know how I feel about that kind of stuff. The platform began as an option for renting special occasionwear (mostly) and to be honest, that’s an idea I can get behind. In fact, I would love to normalize renting bridesmaid dresses, formal wear, even wedding dresses! So many things that get worn one time BY DESIGN!!!

In 2016, Rent the Runway debuted their Unlimited plan (I’ll get into that later), really shifting away from rental as a once-in-a-while service to a part of daily life. A few years earlier–2012 to be exact–LeTote arrived on the scene, offering the opportunity to rent everyday wear, from work clothing to workout clothing. Another company, CaaStle, jumped into the mix to offer this kind of everyday clothing rental, both with its own in-house brands Gwynnie Bee (plus size clothing) and Haverdash, but also brand-exclusive rental from Express, Ann Taylor, NY & Company, and others. American Eagle was about to offer rental and it was rumored that Abercrombie was thinking about it. Lots of smaller rental startups were popping up, too. You know how everyone has been talking about resale (and launching their own platforms for it) for the past few years? Well, rental was being cast as THE FUTURE of fashion in 2018!

Let’s go back to that study that determined that renting clothing has a higher climate impact than just throwing away clothing…

Renting generated the highest amount of emissions because of all the transportation involved. Let’s think about that for a minute, using a dress as an example:

First the dress is made overseas (most likely) and shipped across the ocean via boat or airplane. Most likely, that dress was transported via air and not the ocean. Before that, it was transported via truck to the port/airport.

Next the dress was trucked from the port to the rental company warehouse. Most likely there was another stop in between at the vendor’s warehouse. All of these stops are pretty standard for all brand new clothing, whether it’s rented or bought.

Next the dress was shipped out to the first renter. Still pretty in line with standard online shopping. But then it was shipped back to the warehouse, where it was laundered and then shipped out to another customer. Then back to the warehouse, back out to another customer, etc etc etc. This is a lot of transportation and a lot of fuel and emissions for ONE DRESS.

This could change if rental companies started delivering all of their orders via electric vehicles, but that would really mean that the shipping carriers like USPS and UPS would have to shift their fleets. So that’s out of control of the rental companies.

Furthermore, the amount of times a garment is rented/transported could be reduced based on the model of service the rental companies offer. For example, for years Rent the Runway offered an unlimited plan, meaning that customers could wear something once, send it back on its own, and order something to replace it in the next few days. I want to say that service gave the customer the opportunity to have 4 garments in rotation at all times, and most customers wanted to get the most out of their subscription (there was a lot of talk of reducing the “cost per wear” which meant renting as much as possible. So the typical Rent the Runway customer would have 1-2 items at home, one on the way back to the warehouse, and another on the way from the warehouse to their home AT ALL TIMES. On average, customers were receiving 16 garments per month–sometimes more depending on where they lived, shipping times, etc–but that would mean 32 deliveries back and forth each month. That’s a lot of rides in trucks!

In the early months at my rental job, the burgeoning rental industry was getting a lot of press. And of course we devoured it at work because our project was for the most part top secret. Very few people on our own corporate campus knew what we were working on! There was one article that made the rounds of our tiny team (and was dissected in great detail). I haven’t been able to track it down, but it has stuck with me for years. There was a Rent the Runway customer who lived in New York City. Customers in Manhattan had the option of dropping off their items at special drop off spots, which sped up the entire turnaround of new items. And this customer was making daily visits to the Rent the Runway drop off location in Soho so that she could have a new item almost every day. Yes, this customer felt that she needed 25-ish new items of clothing each month. And she mentioned how she was “rekindling” relationships with old friends/acquaintances who lived near the Rent the Runway drop off location so she could use her time more efficiently by working socialization into her clothing obsession.

I think this is a great moment to talk about the financial model of rental. Like, how does a company make a profit off of renting clothing?

Launching and running a rental company is not cheap. You can’t just start a rental service without a ton of capital. In fact, Rent the Runway has received about $400 million in venture capital over the years. The company also went public in October 2021. But guess what? Despite all of that money flowing in, Rent the Runway has never turned a profit. LeTote has also never been profitable.

So what do you need to start your own rental company?

A laundry facility, including industrial washing machines and dry cleaning equipment, as well as machines to steam and press clothing.

Sewing machines and other repair equipment

A huge warehouse space for storing all of the clothing.

A technological infrastructure that allows you to track where each garment is. If you’ve ever rented clothing, you’ll notice that each garment has a tiny barcode, often attached to the brand label. That’s the unique item number for that garment, allowing the rental service to scan it and track it along its journey through the warehouse, out to the customer, through laundry, and back into the warehouse. Those barcodes, the system that tracks them, and the equipment for attaching those barcodes…well, that costs some major money, too. It goes without saying that you’ll also need a good website, with good functionality that connects to the warehouse inventory, so customers can always get up-to-the-minute accurate information about what is available to them.

You also need a huge staff for receiving, sorting, cleaning, barcoding, inspecting, and shipping clothing. The flow of clothing in and out of the warehouse is complex, with a lot of touch points along the way. A new garment is received, unpacked/unwrapped, barcoded, hung, and then added to inventory. A worker finds each garment in the warehouse to pack an order, while another worker packages up the order and ships it out. Meanwhile, other workers receive the returned rentals. They scan them back into the warehouse, sort them by laundry needs, and send them over to the laundry team, who washes, dry cleans, presses, steams, etc. Then the items go to inspections, where more workers inspect for any quality issues like holes, pilling, missing buttons, broken zippers, and stains. All the things that can go wrong with clothing. If an item needs more laundry assistance or repairs, it is sent off to the repairs department. If an items passes inspection, workers move it to the warehouse, where it will hang until the next time it is rented. That’s a very simple version of the process, and yet, WOW, so many workers needed to do those jobs! That costs money! Imagine a model like Rent the Runway’s Unlimited plan, where stuff is just constantly moving in and out of the warehouse. That’s a lot of workers!

You also need inventory. And a lot of it, with steady newness arriving. Because the thing about rental (just like regular shopping) is that customers are always looking for something new and trendy. So you need to have new arrivals constantly. And what if you already had access to brand new inventory at the cost of making it, rather than the much higher (usually twice as high) cost of buying it wholesale? That could make this a lot more affordable…

Which is why fast fashion retailers are at an advantage for starting their own rental platform because they often have the capital to make the investment in laundry facilities and technological systems, along with access to super cheap new clothing. Once again, rental is a great way for fast fashion brands to keep their hands in their customers pockets without having to make any larger systemic/ethical changes. And sure, they’ll have to invest in all of this stuff, but it will protect their business from any declines in business when we all get sick of fast fashion.

But that said…how does this kind of business make a profit? I’ve already told you that no one is making a profit yet.

In a standard retail model, the retailer buys the product for a cost, sells it at a much higher price (that’s the markup) and pockets the rest in profit…well, that’s a simplified version, because that profit is called “gross margin dollars” and they use those gross margin dollars to pay for all of their expenses like employees, offices, equipment, stores, warehouses, advertising, etc. But then what’s left is the actual profit.

This model of making profit is pretty straightforward. Lower your expenses by paying people less and negotiating lower costs on the items you’re selling, and you’ll make more profit.

But in the world of rental, that’s not how it works. Now I will tell you this: rental platforms (all of them) offer the option of buying the clothing you’re renting, often at a discounted price. And if the company has a good algorithm in place, that price will be unique to that garment and its history: how long it has been in stock, how many times it has been rented, its popularity, etc. Fun fact: a garment that has been rented 100 times might be more expensive to purchase than something that was rented just a handful of times BECAUSE it is so popular. Kinda surprising, right?

Selling clothing to customers is part of the financial model of rental and it’s definitely a lever that rental services pull when they need to free up some cash. So suddenly they will offer everyone a bigger discount that they cannot resist. But if they are running into inventory shortages, they take a different approach. This happened with Rent the Runway a few years ago when they brought in way too many subscribers without enough inventory to keep them happy. To hold on to every last garment, they reduced the “discount” to just a few percent, in an attempt to discourage purchasing. It’s important to mention that in much of the research I’ve done, a decent chunk of customers admitted to purchasing just about every item they rented, which is pretty concerning. Buy 5 or 6 items every month (that’s what most of these services offer in their standard subscription package) and soon you’re buying 60-72 new garments each year. That’s exactly what we’re trying to avoid here!

So yes, selling clothes is a small part of the financial model here, but the major source of money is subscription fees. And to a certain extent, the amount of money you will have coming in each month/year is pretty predictable. Set a target of subscribers you expect to have each month or year. Plan that a few will quit here and there and set goals for new subscribers. Of course, that can go off the rails if you have a global pandemic and no one goes anywhere for a while or has the money to rent clothing. But in general, it’s a safe bet that if you offer decent service and enough choices for customers, you’ll be good to go.

Now come the expenses: employees, laundry chemicals, energy and water bills, and most importantly: all that shipping. Rent the Runway had to discontinue their Unlimited service because they were bleeding money on all that shipping. Overall, all of these expenses are kinda non-negotiable and while you could tweak them a little bit, there’s not a lot of opportunity to reduce them. You could buy laundry chemicals in bulk and save a few bucks. You could pay employees as little as possible, but there are laws soooo….you’ve got to reduce costs on inventory. Meaning that you want to buy clothes as cheaply as possible, which means, you’re going to buy fast fashion clothing as much as possible. You’re going to ask brands to switch into cheaper fabrics and trims to keep costs down. Maybe you’ll keep some fancier brands in stock to keep customers on the hook, but those will be a tiny part of your overall inventory. Put a pin in this idea of fast fashion clothing because we’ll be coming back to it. Trust me, it’s a decision that will come back to haunt these rental companies.

The financial model of rental says “okay, we’re going to have this many customers…and they’ll be paying this much every month to participate. After all of our operational expenses, we have this much money left.” Now you might think, okay, all of that money can be spent on inventory. But of course, the rental company needs to make some profit. Or at least have some money leftover to pay off the loans they took out to build that warehouse and buy those laundry machines. So, it’s up to someone to determine the bare minimum number of garments required to fulfill customer expectations. And reaching this number is part science, and part art! Let’s say you have 50,000 customers each month. They each get to rent 5 garments. Well, that’s 250,00 garments required to meet the demand. But customers need options and sizes. . So maybe you want to have 10 garments available per subscriber. So that’s a total of 2.5 million items. And while that sounds like a lot, I almost don’t think that’s enough. I think customers could be disappointed. And subscriptions are shipping in and out of the warehouse all through the month, so you might want a little extra.

But let’s say 2.5 million items is the number that you have to keep in stock all the time. You’re going to want to account for the items that are bought every month and therefore, go out of circulation. And of course there are garments that will be damaged/unwearable or lost by the shipping service. You already know that you have to bring in new items every month, too. So modeling all of this will require an assumption. And that assumption is “how many times will each item be rented (on average).” This number will change over time. Maybe you’ll think 12, so a garment can be rented out for a few year (on average) before being retired. That means some things will be rented 20 or 30 times, while others will be rented once or twice before being damaged beyond repair or purchased. And then you’ll hit that average of 12 rentals. The thing is every time a garment exceeds 12 rentals, it becomes more profitable. When it’s rented only once or twice and then has to be damaged out, it becomes less profitable. In a good situation, this will motivate a rental company to repair every item and remove every stain. From what I have read–and I take this with a grain of salt–Rent the Runway is fastidious about repair and stain removal because it wants to get every wear out of a garment as it tries to become profitable. Other companies care less, mostly because they are buying clothes so cheaply in the first place. And that’s too bad, because I think rental has a place in the circular economy, but with some caveats in place. We’ll get to that…

I think it’s important for us to examine all of the ways in which rental offers the illusion of sustainability but probably isn’t delivering it.

First, of course there is all of the transportation, delivering the orders back and forth. However, like I said, there are ways to mitigate this, via electric vehicles, creating hubs for drop off and pick up that would require less delivery vehicles out on the road, and slowing down the rental process, eliminating all services like Rent the Runway’s Unlimited plan. Furthermore, rental companies just bleed money on shipping (because they cover each trip to/from the warehouse). If they could reduce shipping costs, they could probably pay their warehouse workers better AND buy more high quality/long lasting, truly sustainable/ethical inventory.

Next, as I’ve already mentioned, most of these rental services are renting out fast fashion clothing, meaning that they are supporting an industry that exploits workers and wastes resources. If rental ever gets as big as industry experts have been speculating, rental would be propping up an industry that doesn’t deserve to be supported! This drive to buy fast fashion inventory goes back to the financial model. Since it’s difficult to cut expenses like laundry and shipping, these companies focus on cutting the cost of the clothing, making fast fashion brands and vendors just too enticing! It’s disappointing that they aren’t taking the longview of buying higher quality clothing that will last longer and therefore be rented many more times. But I can’t help but think that’s part of a larger quandary for rental services that really starts with the customer: customers want new stuff all the time. Occasionally they will rent the same thing more than once, but unfortunately our brains have been fast fashion-ified, too. We want something new all the time. We don’t want to wear the same thing for multiple events. We want a new outfit for every instagram post. And it doesn’t help that rental services have swooped in to say to us “hey, we’re going to let you continue that behavior, but we’ll make it ‘sustainable.”

As you know by now–but I’m going to repeat this for any new listeners–in the past decade just about every large brand and retailer has adopted the fast fashion model of doing business: over production, overconsumption, and exploitation. So even on a high level, the majority of brands on most rental platforms will be fast fashion. Rent the Runway ostensibly curates a higher end offering, but to be honest, there are some obvious fast fashion brands working their way in there, along with some fancier brands that probably operate using the fast fashion model, too. LeTote, a less expensive option, is completely fast fashion brands and suppliers.

But does this drive to cut the budget for inventory by renting out primarily fast fashion brands bite the rental services in the butt AND make the whole model less sustainable? The answer is…well, yes, definitely!

Often the fit and quality aren’t great, so customers are disappointed and end up buying more new clothing anyway, defeating the whole purpose of rental in the first place! Or they ask for replacement garments, which are shipped out and therefore, increase the carbon footprint of the whole thing. And this costs rental services more money on the shipping side.

Often these clothes are made of synthetic fabrics because they are more stain resistant and hold up better to washing. Most rental companies try to avoid natural fibers because they might shrink, they get wrinkly (so they need pressing, which means you need to pay someone to do that), and they can stain more easily. In fact, one thing I learned very early on in my brief career in rental was that even the fancy rental services like Rent the Runway were asking brands to produce versions of their lines in polyester because the fabrics held up longer and were less expensive. Of course there are major drawbacks to this. These fabrics are made from oil, they are not biodegradable, and they shed microplastics when they are laundered.

There’s another variable to take into account here, and it’s one that bummed me out over and over when I was working for that rental platform: customers don’t treat these garments with care. I could not believe the state in which many of these clothes returned to our warehouse. Covered with BBQ sauce and drenched in rosé, missing buttons, with gaping holes. Sometimes shrunken to child size. It was as if a big chunk of our customers belonged to a parkour club whose regular meetups ended at a wine bar with a bbq buffet. Occasionally a customer would decide to cut a pair of jeans four inches shorter or a crop a tshirt…that they did not own! So many things were damaged beyond repair. But others could be fixed.

Here is the catch: it’s expensive to repair things and remove stains. You have to pay someone to do that, right? So if a garment wasn’t that expensive in the first place. Like let’s say it was a dress that cost $12 (yes that really happens). And the zipper was broken. You could have one of the staff seamstresses fix it, but it would take about an hour and they are paid $20/hour. Suddenly you’re spending more money on repairing this garment than you actually paid for it. If you’re running a rental company because you’re into sustainability, then it’s a worthwhile expense. But if you’re running this company to get rich or pay dividends to shareholders or make up for lost sales at your fast fashion parent brand…well then you’re going to toss that dress out and replace it with another $12 dress (and save $8).

Once again, rental companies are looking to keep costs as low as possible, especially when it comes to the clothing they are renting out. They could do that by buying less new stuff and offering the same items for longer. This would allow them to invest in higher quality, longer lasting garments. But remember: they are selling the illusion that we can continue to have tons of new clothes all the time, all without the pesky guilt of buying them ourselves. To keep that illusion going while still staying in business, they are substituting cheaper fabrics/trims on more expensive brands, and buying into more less expensive fast fashion brands too. And this stuff–as you and I know well–doesn’t stand up to a lot of wear.

Here’s where all of this starts to really break down. Obviously some stuff gets damaged on its first rental, and other stuff gets rented 20 or 50 times…but it still means that on average, these clothes aren’t getting worn more times than you would have worn them if you owned them and were adopting a more circular model of wearing things over and over again, mending them, caring for them, and then thoughtfully rehoming/reselling them when you were done with them.

Lots of stuff gets damaged (holes, rips, runs, missing buttons, and broken zippers), and it’s “too expensive” to pay someone to fix it. The same goes for stain removal, pilling on sweaters, things that somehow get smelly in a way that laundry can’t fix (yes that happens), and as I already mentioned, people sometimes wash and shrink garments while they are renting them.

The industry isn’t required to report the amount of product they are damaging out, but I want to assure you that it is a surprising amount, especially for the rental brands that focus on more day-to-day clothing, mass brands, fast fashion brands. This is why all of the platforms–includingRent the Runway– are getting into the resale/secondhand game because they want to recoup the losses of all of that damaged product.

Next, let’s think about all of the laundry! Most of these rental services use a mixture of dry cleaning (which btw is terrible for the planet) and wet washing (literally massive industrial washing machines and detergent). They clean every single garment when it comes back, even if it was never worn. That’s what they have to do. So lots of chemicals and water get wasted.

Furthermore, it’s up to the workers who receive the returned rentals to sort them for various wash cycles and dry clean processes, to ensure that more garments aren’t damaged. But guess what?? Mistakes get made a lot. Like a lot. I know that Le Tote damaged a ton of inventory a few years ago by overfilling washing machines. Their inventory wasn’t sufficient to meet subscriber demand, so they were trying to move clothing through the laundry part of the process as fast as possible. I saw people complaining about receiving clothing that had shrunk, bled, or lost its shape because LeTote continued to rent out these damaged clothes. Oh yeah, this is a good moment to mention that part of my research (both for my job in rental and this episode) was joining lots of Facebook groups and subreddits for people who rent clothing. I also saw Rent the Runway having similar laundry and repair issues a few years ago, when their subscriber base was exceeding inventory availability. Customers received dirty, stained, shrunk, damaged clothing because the company was trying to push items through the process too fast.

There’s a ton more we could cover in this episode if you all ever want a part two on rental (let me know if you do): we could talk about how Rent the Runway treated its workers in the early days of Covid (spoiler: badly and recklessly), we could talk about the impact of the pandemic on rental (although it’s rebounding) and we could talk about how LeTote is suing Urban Outfitters for stealing its proprietary secrets to launch its own rental platform, Nuuly (the allegation is that Urban Outfitters expressed interest in purchasing LeTote, did weeks of due diligence research that included learning about all of LeTote’s systems and processes, then backed out at the last minute, launching their own rental service instead). I’ll share some links in the show notes for you to read about all of that. And maybe we can do a follow up episode or an instagram live where I can discuss those items with you.

My own experience working in rental was pretty traumatic. Like some really bad stuff happened to me at the job that I’m still coping with. It was a very toxic, dysfunctional culture. And working on this episode definitely dredged a lot of that back up. I woke up in the middle of the night last night and found myself running through all of the messed up stuff I witnessed and experienced at that job. I felt angry, sick, and sad. But I’m glad that I had the experience of working in rental. It taught me even more about how the clothing industry has changed for the worse, how rental is and how it could be, and most importantly, it was a big lesson in greenwashing (and spotting it).

But now that we’ve spent THIS time together discussing rental and breaking down how it works, it’s time to answer our question: is rental a sustainable option? Notice how I didn’t ask “is rental the MOST sustainable option?” Because we already know the answer there is “no.”

Here’s my biggest issue with rental: It only continues to reinforce that stale, consumerist idea that we need to wear new clothes all the time, especially for every instagram post or wedding or birthday or picnic. It says that we need constant newness and we need to participate in every single trend. Rental encourages us to always want more more more and new new new. Especially as more rental services have popped up to provide us with day-to-day clothing, whether it’s sweatpants, jeans, work clothes, workout clothes, you name it.

The only sustainable way forward is true circularity, aka slow fashion. It means buying fewer brand new clothes, shifting to a secondhand first mindset, and wearing things over and over again. It means caring for your clothes to make them last as long as possible for you and for the next wearer. It means mending and stain removal. It means being a proud outfit repeater! And it means thoughtfully rehoming our clothing when we no longer can or will wear it.

Do I think rental has a place in our lives? Sure!

I think renting special occasion clothes is a great idea since we wear them so rarely! Listener Iris (hi Iris) told me a while back that it is very common to rent a wedding dress in Mexico and I think mainstreaming the rental of wedding and bridesmaid dresses is GENIUS.

If you have a job where you have to wear professional clothing and you don’t have any of that kind of stuff, then rental is a great option for you, too!

If you need specific clothes for a trip (like you live in a warm place but are traveling somewhere cold where you’ll need a proper winter coat or sweaters), rent them!

I think renting maternity clothing is an amazing idea, too

But I don’t think you should be renting regularly, I don’t think you should be getting new clothes all the time, which is what rental offers you.

But also…maybe you don’t need to rent any of these clothes. Because maybe you can borrow them from a friend, family member, or neighbor. Dustin and I have been rewatching Mad Men and one thing that has struck me is how often I see women loaning one other clothing on that show. I love that! The other thing that has struck me is what a toxic character Don Draper is (even if he is sexy) and I’m concerned that I didn’t notice that on my first viewing. That’s a whole other podcast, but if I had all the free time in the world, I would have a podcast about Mad Men, another about 90 Day Fiance, and a third about Rock of Love. Oh and there would be a fourth podcast about The Doors film (directed by Oliver Stone) which I have seen no less than 50 times because I always watch it when I’m sick. I don’t know why.

But back to rental: ultimately rental has achieved a level of success because it promises us that we don’t have to make a change in order to save our planet. And you know what? That’s just not true. We’re all going to have to make changes in our habits, our society, and our larger economic systems. But we’re here to do that, right? I know that change sounds scary, but it oftens feels really great when it happens. Rental can be a part of a circular economy, but it has to change its motivations. When your mission is profits over everything else, things get muddled and mixed up. I know that a sustainable, ethical business model can be profitable, but it’s going to look a lot different than anything we see right now. I also think changing the way our society looks at clothing, all of our behaviors around stuff and style and new stuff/style…that’s all going to have to change alongside it. But it can happen. It WILL happen, if we’re all in this together. Okay, get out there and wear something that you’ve already worn many, many times before!