What: Browns focus continues to support London’s new and emerging designers

Why is it important: The boutique “Browns Focus: Series Two” will spotlight seven fashion designers. Each designer has curated an exclusive capsule collection for the brand that’s available from Thursday online and in-store at Browns East.

The London boutique has partnered with Black-owned art space Home by Ronan Mckenzie and R.O.T.A., a Browns-created community with a mission to achieve diversity and representation across the business.

Browns Focus made a comeback last year, where designers were given creative control to produce small collections and visual imagery that best represented them and their community.

Browns has been instrumental in underpinning the future brands of tomorrow by mentoring talent with substantial sustainable and inclusive credentials. They were one of the early stockists to take Bethanny Williams under their wing.

Browns continue to support young fashion designers

What: The luxury footwear and accessories brand taking over a prime space in the London branch, Selfridges' 'Corner Shop'.

Why it is important: The initiative comes as more and more foreign tourists return to the UK after the pandemic period and British consumers are once again turning to seaside getaways.

Even with the current issues with flight cancellations, holiday bookings are continuing apace.

The core of the collection on display in the shop is the Greekaba summer collection, but the 'Loubi's on the Beach' theme also includes exclusive pieces, as well as some preview products.

Louboutin launches beach-themed pop-up at Selfridges (French)

What: Inflation is affecting the purchase of sustainable goods but luxury continues to grow.

Why it is important: Financial anxiety is a top concern in updated data released from Deloitte’s Global State of the Consumer Tracker project that explores consumer priorities on a monthly basis. Concerns about high prices were expressed by over 80% of respondents in both the US and the UK as of May.

Consumers skipped sustainable options as 41% deemed them too costly, 24% responded that sustainable products were not a priority, and 13% cited unwillingness to wait longer to obtain such products.

Even though inflated prices are a top concern worldwide, the luxury sector appears immune. American consulting firm Bain released that global luxury goods sales are set to rise at least 5% this year to 320 billion dollars in the conservative version of their estimation.

Luxury sales have remained strong during the pandemic recovery due to demand in Europe and the US. In 2021, the US was the single largest national luxury market, even as Forbes noted that luxury fashion brands like Louis Vuitton, Hermès, and Chanel raised prices substantially, without much consumer resistance thus far.

There are thousands of independent brands and emerging designers around the world operating more and more sustainably from inception: they source locally while supporting regional ecosystems, upcycle materials, use dyes with natural ingredients, produce less waste due to their size, represent a more diverse range of creators and workers, and yes, their items typically cost more than similar alternatives.

During the height of the pandemic in 2020, all businesses suffered setbacks as entire economies shut down, the independent brands, even faced bankruptcy. 40% of the members of the Council of Fashion Designers of America (CFDA) were brands worth under USD 1 million. In contrast, a brand like Chanel had an operating profit of USD 2.05 billion that year, even after a 41% decline from suspended operations.

If the world economy shrinks, it will likely be the less recognizable independent brands, the emerging talents of the industry who take the largest hit again, especially those, as indicated in the Global State of the Consumer Tracker, who use responsibly made materials with fewer environmental impacts that cost more, as all brands large and small are implored to do to reduce emissions.

Quality and sustainability have taken a backseat to the desirability of high price just for the sake of it. A study that focused on consumer motivations for accepting high luxury brand prices in both Western and Eastern cultures explained “Unexpectedly, the pursuit of high quality is not a driver. Instead, obtaining status and exclusivity is what moves buyers to justify the expense, not anything about the environment.“Price functions as a fee for the right to exhibit the logo of a well-known brand and co-brand oneself.”

Sustainable goods see decline due to high cost, yet luxury sales grow

What: Due to an aggressively large over stock of retail inventories, Target is cancelling orders with suppliers and slashing prices on merchandise in store.

Why it is important: In an attempt to clear out the large inventory, the company is slashing its prices ahead of the critical upcoming fall and holiday shopping seasons.

It seems that there is a shift emerging amongst Americans as they are no longer spending on home renovations or home decor they are now shifting towards travel, night outs, etc. The shift that has emerged in Americans pivoting away from pandemic spending was laid bare in the most recent quarterly financial filings from several major retailers.

Target reported last month that its profit for the first quarter compared to the same time last year dropped by 52%.

With the decision to cut prices Target is looking to clear out the unwanted merchandise to make more room for in-demand products like groceries and makeup products.

Target is working with their suppliers to cover costs for those vendors whose orders are being cancelled.

Target is looking to clear out overstock of merchandise from shelves

What: Consumers are choosing to shop more consciously, according to Farfetch’s second annual conscious luxury trends report, which reveals that the number of its customers who purchased a product from its conscious collection increased 60% year-on-year in 2021.

Why it is important: France experienced the strongest growth globally in conscious shopping on Farfetch with an increase of 149% year-on-year in gross merchandise volume (GMV) from conscious products and South Korea demonstrated the biggest increase in pre-owned spend per item (ASP), up 116% year-on-year.

Customers are continuing to shop more consciously and brands and boutiques on Farfetch’s platform are responding to rising consumer demand by consolidating and increasing their commitments to improve their impact on people, planet and animals.

Farfetch now sells 220 brands that are rated highly by Good On You, up 13% year-on-year, and the amount of conscious products on the platform supplied by its network of boutiques grew 40 percent, while GMV from conscious products from boutique partners was up 46 percent.

Farfetch adds that its shoppers are wanting to be more responsible, as searches for conscious product terms on Farfetch increased by 93% year-on-year, and the sale of conscious products grew 1.8 times faster than the marketplace average over 2021.

Customers also have a new focus on buying quality pieces with longevity in mind, with 79% adding that they are now buying a higher proportion of luxury fashion because they believe it is more sustainable than fast fashion, being of higher quality and longer-lasting.

Farfetch’s circular fashion initiatives are resonating with customers and these services and are “attracting new and valuable customers,” looking to extend the life of their items. 22% of survey respondents said that in the last 12 months, they have started selling fashion items they no longer use, while 20% added that they have donated a used fashion item in the last year, and 13% said they have repaired one.

Farfetch unveils second conscious luxury trends report

What:  The first international location for the London-based multi-brand retailer.

Why it is important: Physical retail and wholesale operations are still strong enough for businesses to expand internationally. There is also an global appetite for specific concept-stores which is only growing now that customers are eager for physical experience to differentiate from online.

Machine-A, the London-based multi-brand luxury retailer has announced its first venture out of the UK by opening a location in Shanghai in September.

The store, planned to span over 245 sqm, will host Raf Simon’s first direct to customer location in the country. They also stock names such as Maison Margiela, Rick Owens and Comme des Garçons.

Multi-brand boutique Machine-A to open a location in China 

IADS SHANGHAI City TOUR 

What: The state of play for AR in fashion, including how Snap's work and that of recent innovators will drive retail in the virtual world.

Why it is important: While the reality of augmenting retail has literally put virtual try-ons front and center for makeup, sneakers, eyewear and furniture shoppers, the consumer proposition for apparel has really only just begun. The challenges are steep, but interest in AR clothing has been gaining momentum in recent years, especially as NFTs and metaverse mania have put a spotlight on 3D digital fashion.

One of the most visible players in this space is social media behemoth Snap Inc., as its investments for Snapchat double down on cloth simulation and body tracking technology. The company revealed that it’s been working on these efforts last year, and it’s clear they’re key priorities, as it has been refining them and expanding the scope of materials.

Enticing people to buy products is an obvious benefit of letting them try on goods, and so then making that easier by allowing them to check out the experience at home is likely to boost sales.

The company released new data this month that casts AR as a highly effective tool for slashing product returns. A survey found that two-thirds of consumers are less likely to return merchandise after using AR. As for fashion, nearly three-quarters said they were likely to buy clothes after using AR in the future. The figure for beauty, where AR is already well-established for makeup try-ons, is 69%.

With the massive push behind AR applications for fashion, it’s more than likely that someone will figure out how to crack it before long, and that means that AR for fashion may finally arrive, ready to connect the massive real-world business of retail and fashion to the emerging virtual world.

AR’s road to fashion

What: Simon Property Group is testing a search platform that allows shoppers to find in-stock items at participating stores within the mall before or during their visit.

Why it is important: Search capability is key to the efficiency and ease of shopping online. An up-to-date inventory tool like Simon Search could encourage consumers to visit malls that have in-stock items they want – but it could also prevent them from taking part in the aimless window shopping experience malls were once known for.

That could help boost traffic to malls, which has been declining for decades and has yet to recover from pre-pandemic levels. Compared to 2019, visits to indoor malls in May this year declined by 3.8%, at open-air centers declined 5.9% and at outlet malls declined 7.7%.

The digital tool, “Simon Search,” can be used via the Simon app, a mall’s website or the interactive directory located on the property, according to a company press release.

The pilot involves 29 Simon properties. Participating retailers include Anthropologie, Athleta, Banana Republic, Gap, Old Navy and J.Crew, as well as Simon-owned JCPenney and Aéropostale.

Simon tests digital search tool for mall shoppers

What: Lotte Duty-Free has announced that it will not renew its license to operate its COEX store in Gangnam, Seoul. Once it expires, Lotte plots to maximise sales at its remaining stores in Seoul; The Lotte World Tower (Jamsil) and the Myeongdong flagship store.

Why is it important: The number of domestic duty-free shops in the region has fallen from 57 in 2019 (pre-Covid) to now just 48. However, South Korea’s duty-free sales have displayed ‘gradual improvements’ during Q1 2022. This follows a 15% increase in duty-free revenue to US$14.7 billion in 2021, of which approximately 95% was sales to foreign customers.

Lotte also plans to expand its product and brand offering at both the World Tower and Myeongdong flagship whilst strengthening marketing activities for both.

Lotte announces COEX store closure

What: Neiman Marcus says innovative immersive store experiences are planned for over the next 18 months.

Why is it important: While many retailers embrace a digital-first identity, Neiman Marcus is touting its blueprint for “retail-tainment.” It is about “reimagining” store experiences, and it entails working with brands and designers to come up with more imaginative and often complex experiences and presentations for shoppers that go beyond the usual retail theater.

The onset of the strategy started with the three-week Prada Coast installation at the Neiman Marcus store in the NorthPark Center in Dallas in June 2021. The setup was elaborate, recreating an Italian beach, with LED walls with live crashing ocean waves, sand, lifeguards, gelato and Prada’s summer collection set in a 2,200-square-foot installation on the main floor.

On Thursday, Neiman’s unveils a Burberry takeover at its store in the Lenox Square mall in Atlanta. The exterior has been wrapped with Burberry’s TB monogram print and more than 50 styles in men’s, women’s and accessories, all exclusive to Neiman’s, are displayed inside.

Neiman’s retail-tainment strategy has been resonating with shoppers and benefited from consumers’ renewed interest in shopping stores. Whether that endures or is just a short-term reaction by consumers after being cooped up at home during COVID-19 remains to be seen.

Neiman Marcus’ latest calling: ‘Retail-tainment’ 

Neiman Marcus welcomes Burberry's summer takeover

What:  Poor inventory decisions and shifting consumer behavior are putting US retailers at risk according to UBS.

Why it is important:  Sales might take place earlier and be more brutal than expected for this season in the US. The inventory level seen by IADS in the Seattle Nordstrom store was already a worrying sight early June 2022.

According to a recent note from UBS, department stores such as Nordstrom, Macy’s, Kohl’s or Dillard’s are at risk of carrying an unprecedented level of excess inventory, due to poorly made decisions at the moment when inventory was ordered for 2022, and a shifting behaviour from customers asking for more dressy styles and dropping the casual look. As a consequence, retailers carry too much stock on poorly-performing categories. UBS expects this to also affect off-price retailers, such as TJX or Burlington stores.

US department stores at risk of an unprecedented inventory excess 

What: As retailers continue their journey down the digital transformation path, they are on a constant strive to be agile in how they respond to ever-evolving customer requirements. One of those retailers being Neiman Marcus Group.

Why it is important: With customer expectations and technology evolving at an unprecedented pace, moving to cloud is no longer a nice-to-have, but a must-have for retail companies in terms of operational resilience, reliability, security, scalability, and agility.

The process of migrating a monolithic application into microservices requires modernizing legacy systems. To accomplish this, NMG incrementally refactored monolithic applications, instead of refactoring the entire code at the same time.

NMG built a Cloud Center of Excellence team, responsible for the complete DevSecOps practice across the organization. They are responsible for setting up the cloud build pipelines, guard rails, governance, platform architecture & security standards, so that different product teams have a certain baseline and are still within those guard rails, can operate really fast and execute scalable and standard performance tested architectures.

Even though NMG started operating in the cloud, they needed to have certain enterprise guidelines, best practices and architectural standards in place. So, they built a solid platform that different product teams can innovate at scale and quickly deliver value to business partners. Serverless architecture also helped NMG elastically scale their app to quickly meet demand.

Some of the rewards for Neiman Marcus Group felt from building their serverless platform were accelerated business agility and speed to market, an increase in online customer satisfaction, and a major uptick in associate productivity as they were given a platform where they have the information and the intelligence needed to engage the customers effectively and efficiently.

Cloud-Native Architecture Transforming Retail: Lessons from Neiman Marcus Group

What: H&M has shut its flagship Shanghai store, its latest closure in China where consumer demand has slumped amid Covid-19 lockdowns and faced a backlash against companies that refuse to use Xinjiang cotton.

Why it is important: The world’s second-biggest fast-fashion retailer entered China in 2007 with the opening of the Shanghai flagship store. H&M had more than 500 stores in mainland China early last year but its website currently only lists 376, including the flagship Shanghai store.

Although nearly a month has passed since Shanghai lifted a strict two-month lockdown, consumers have yet to return to malls in significant numbers.

Chinese consumers have also beat a retreat from its products after a letter in which H&M expressed concerns about allegations of forced labour in the Xinjiang region came to light in 2021.

H&M Closes Shanghai Flagship Store

What: Bottega Veneta is re-releasing handbags from its archives, considering lifetime repairs, and has an internal app aimed to bring staff up to speed on sustainability.

Why it is important: Bottega Veneta will be selling handbags from its archive on an integrated platform called Bottega Series, accessible via its e-commerce site. The bags will be a re-release of its timeless leather bags from past collections referencing as far back as the 1966 intrecciato bags. The bags will be sold at full-price, which reflects their enduring value. New monthly pieces will be dropped for a limited time, the brand said. A lifetime warranty programme is also in the works.

Bottega Veneta is not the first Kering brand to explore circularity, though today’s efforts mark a significant step-up from the brand. Bottega says the philosophy of Bottega Series is to “challenge the very construct of seasons – pieces that are timeless do not need to abide by a seasonal calendar.” Instead, the brand says it is focused on creating objects that last forever.

To support future ventures into circularity, Bottega Veneta is also re-assessing its design process, with a focus on durability, craftsmanship and creativity. At the end of 2021, it developed an internal app to simplify sustainability for its staff.

The idea is to reduce overall production in the coming years but focusing on high quality, timeless products, soon to be sold with a lifetime warranty.

Bottega Veneta to re-release archival pieces, build lifetime repairs 

What: Big brands are adopting crypto payments, but, before brands follow, they need to consider several factors, from how to handle transactions to the risks involved.

Why it is important: Fashion and luxury sellers may be feeling some peer pressure right about now to jump on the bandwagon and start taking cryptocurrencies as payment. But there are costs in time and money involved, so despite the hype, companies need to decide what's right for their business and their brand before they jump in.

Many big brands have turned to companies such as BitPay or CoinGate to simplify the process for them. These payment gateways can integrate into the brand’s online checkout or point-of-sale system in stores, allowing the merchant to accept any coin they’re set up for and handle transactions from start to finish. A shopper typically scans a QR code to make a payment. The payment gateway accepts the cryptocurrency directly, validates it, converts it to fiat currency, and deposits the funds in the merchant’s bank account.

Brands have different options for handling payments, including gateways that do all the work for a fee, but there are still risks and legal issues to consider. Unlike a credit card, a crypto wallet can be anonymous, raising the threat of illicit transactions.

Brands are still subject to reporting large and suspicious purchases. Importantly, they need to ensure they’re not taking payments from sanctioned individuals or enabling money laundering.

Still, some brands may want to associate themselves with crypto as part of a longer-term web3 strategy. Allowing crypto payments can be an effective way of attracting the crypto audience, plus, the group of shoppers wanting to pay with crypto does look to be expanding.

What brands should know about accepting Cryptocurrency 

What: The Norwegian Consumer Authority has found outerwear brand Norrøna’s use of data from the Higg Index to back up environmental claims is misleading to consumers and warned H&M Group against using the same type of marketing.

Why is it important: The decision comes amid mounting scrutiny of big fashion companies’ sustainability claims, as concerns about greenwashing attract greater regulatory interest. It also deals a blow to the Higg Index, a widely used suite of tools developed by trade group the Sustainable Apparel Coalition.

Norrøna was among the first to use a consumer-facing product labelling tool introduced by the SAC last year, using data from the Higg Index’s materials module to show shoppers how a handful of its organic cotton T-shirts measured up on environmental factors like water use and global warming, compared to an equivalent T-shirt made from conventional cotton.

While Norway’s consumer watchdog only investigated Norrøna’s marketing, it also wrote to H&M Group warning the company to ensure it is not using the same kind of marketing by Sept. 1 or risk economic sanction. H&M is among the companies that have used Higg data in consumer marketing. Meanwhile, the SAC received a warning that it could be held responsible if its members use Higg data as a basis for environmental claims in their marketing.

The finding plays into an increasingly urgent debate over what “sustainable fashion” really means and how brands can back up any marketing. The SAC has sought to position the Higg Index as a suite of tools that can underpin such claims, but critics have argued the tools are not fit for use in marketing messages in line with the NCA’s decision.

H&M misleading sustainability claims

What: Two Swedish giants are teaming up to promote English design and innovation.

Why it is important:  This initiative kills two birds with one stone: find something to do with the leftovers of the previous Oxford Street store purchased by Ikea, and root their name into local communities by promoting regional culture.

H&M and Ingka Group are teaming up to open the Atelier 100 space in Hammersmith (London) with the objective to promote local British designers and entrepreneurs. Following a regional contest, 20 winners will display their products in the Atelier 100 space.

The products are often using material recycled from the old stocks of Top Shop, which flagship store on Oxford street was purchased by Ikea earlier in 2021.

H&M and Ikea’s owning company team up 

What: Nata Dvir’s rise through the ranks of Macy’s to become the retailer’s chief merchandising officer has been meteoric, Dvir talks about the secret sauce to serving consumers and the approach to climbing the ranks.

Why is it important: Dvir’s roles have spanned the retailer’s offering: She started in intimate apparel, then worked on cross-category strategy, in addition to fine jewelry and women’s shoes. For the past five years, though, she’s helmed the retailer’s beauty business and then was given merchandising responsibility for everything.

The secret is understanding so many different categories, and how customers have been able to shop across those categories. As chief merchant, versus running beauty, time is spent thinking about the customer across all the different categories, and how Macy’s brings it all together. Investing in categories that are important for the customers and new categories that customers are looking for from Macy’s.

For instance, in Beauty, it is important to keep customers in the loop about what’s trending and keep current on each new trend on TikTok or Instagram so they can provide what customers are looking for.

Dvir credits her rise to that ethos, as well as the proper guidance.

Macy's retailer's chief merchant’s view on customers

What: Neiman Marcus Group announced the closing of the USD 200 million common equity minority investment by Farfetch Limited in NMG, and the signing of the commercial agreements with Farfetch Platform Solutions.

Why is it important: Neiman Marcus Group will use the proceeds to further accelerate growth and innovation through investments in technology and digital capabilities to make life extraordinary for its customers.

In addition to the minority investment Farfetch is making in NMG, Farfetch and NMG have negotiated a commercial agreement whereby Farfetch Platform Solutions will re-platform the Bergdorf Goodman website and mobile application.

As a result, Bergdorf Goodman will introduce its digital customer experience and curated offering to customers globally, integrating seamlessly with the iconic New York City flagship.

Neiman Marcus is committed to using select FPS modules, including foundational international services. Both Bergdorf Goodman and Neiman Marcus will join the Farfetch Marketplace as a partner, adding participating brands in key global geographies.

Neiman Marcus Group announces the closing of a USD 200 million minority investment by Farfetch 

What: Zalando is looking to go bigger in streetwear and has bought a majority stake in Highsnobiety, the media brand at the crossroads of streetwear and luxury.

What it is important: Highsnobiety will act as a strategic and creative consultant to Zalando, but also “retain its editorial independence, with creative agency work remaining fully autonomous and management structure unchanged.”

Highsnobiety’s art of turning stories into products and products into stories, will bring Zalando these capabilities to their commitment toward fashion inspiration, and together they can reimagine the future of content and commerce. Zalando’s unrivaled expertise in scaling e-commerce platforms will bring Highsnobiety to the next level.

For the deal between Highsnobiety and Zalando, Highsnobiety was advised by Liontree, V14 – Vogel, Heerma & Waitz, and Taxess. Zalando was advised by White&Case, PwC, and McKinsey.

Zalando buys control of Highsnobiety 

What: Levi Strauss & Co and H&M Group ranked highly inThe BoF Sustainability Index 2022.

Why is it important: Every year, BoF Insights benchmarks the sustainability efforts of fashion’s biggest companies within the luxury, high street (or mass market) and sportswear segments. The index was designed to assess the fashion companies’ progress towards ambitious environmental and social targets across six impact categories, designed to align with the UN’s Sustainable Development Goals.

The 2022 edition of the Index analyses the sustainability performance at 30 of fashion’s largest public companies, addressing the 10 biggest by 2020 revenue in each of the three segments. It assesses performance across six impact categories: Emissions, Transparency, Water & Chemicals, Waste, Materials and Workers’ rights.

The high street segment was one category to note with the overall average score for the segment comes in at 27 points out of 100, Within the individual impact categories, the segment performs on par with the overall Index average in Emissions and Materials, but slightly underperforms in the four other impact categories assessed. It also contains the only company (Chinese retailer HLA Group) in the Index to score no points at all, making it one of two in this group of companies to score less than 10 points overall.

Levi Strauss & Co. tops the high street segment’s rankings with an overall score of 44 points out of 100, closely followed by H&M Group with an overall score of 42. Both companies place in the top five when ranked against all 30 companies assessed in this year’s Index.

Are mass-market fashion companies the industry’s worst sustainability performers?

What: JD.com sees worrying signs that shoppers are reluctant to reopen their wallets even as major cities emerge from bruising Covid lockdowns, suggesting consumer spending may take months to recover.

Why it is important: The months-long closure of cities like Shanghai has caused a fundamental shift in how people spend their money, with a pullback in discretionary spending continuing even after the lockdown of the financial hub ended a few weeks ago.

The slow recovery now means it will be even harder for China to achieve the full-year economic growth target of around 5.5%, especially if there are further large-scale Covid outbreaks.

Even with policymakers promising more support for private investment and the platform economy to mitigate the Covid shocks, economists have continued to cut their forecasts for growth this quarter and this year. Online retail sales will likely only grow in the low single digits this year after expanding 12.5% last year.

Logistical hurdles have also persisted as various places across China implement Covid Zero policies, including testing and travel restrictions, with varying degrees of aggressiveness. The State Council gave warnings this past weekend to provinces including Hebei, Anhui, and Shaanxi for excessive enforcement of policies that have blocked domestic supply chains.

However, spending from consumers in smaller and less developed cities is picking up, particularly those less affected by Covid shutdowns. Spending growth in smaller tier-five and tier-six cities has greatly outpaced that of tier one and tier two cities like Shanghai and Shenzhen.

JD.com warns consumer recovery is months away

What: ‘Buy now, pay later’ services that allow consumers to pay for purchases in installments have driven higher spending at apparel retailers in recent years, and investors worry higher interest rates and a slower economy will spell trouble for the model.

Why is it important: Concerns are growing that the boom in short-term financing that has fueled apparel sales is saddling a growing number of vulnerable shoppers with debt they can’t pay. But the concept can still benefit brands, lenders, and consumers, with a few key changes.

Despite its recent problems, the category looks set to keep growing. Earlier this week, Apple announced it was launching a BNPL service. If deployed responsibly, buy now, pay later can benefit lenders, retailers, and consumers. But changes are needed: BNPL firms can reposition their installment plans as a way for young and low-income consumers to build credit and do a better job screening out those who are most likely to fall behind on their loans. Retailers can do more than add a button from Klarna or Affirm alongside the credit and debit card options on the checkout page; they can educate consumers about how installment payments work and be as transparent about the terms of these loans as they are about shipping.

Linking BNPL with credit agencies could allow a wider group of consumers to build credit histories, which are necessary to gain access to many benefits of the financial system.

Retailers should roll out financial literacy tools to help young shoppers navigate BNPL platforms and monitor their spending, with branded education materials and budgeting tips that can be shared via their influencer partners.

At Afterpay, customers can set up budget trackers to help manage when installments are due and set up reminders ahead of their scheduled payments.

Education can be difficult when brands see BNPL primarily to nudge consumers to spend more. The wide array of plans, each with its own schedule of payments and interest rates, can also be confusing. BNPL lenders typically don’t charge interest for smaller payments made over a few weeks, but annualized rates can be as high as 30% for big-ticket items financed over months.

A Better Approach to ‘Buy Now, Pay Later’

What: As women dress up again, Rent the Runway’s revenue doubled in Q1.

What it is important: Before the pandemic, Rent the Runway had begun to expand its market by offering more office-appropriate options, but its momentum right now is being driven by special occasion dressing.

Rent the Runway doubled its revenue in Q1, from USD 33.5 million last year to USD 67.1 million, according to a company press release.

Its active subscriber base rose 82% to 134,998 by the quarter’s end, a 17% increase from the previous quarter and its highest end-of-quarter count.

Gross profit rose 178% to USD 22.5 million, as gross margin expanded to 33.5% from 24.2% a year ago. The company’s net loss widened from USD 42.3 million last year to USD 42.5 million.

The recently unveiled at-home pickup offer, available in 20 cities to more than a third of the subscriber base, is proving to be not only more convenient to customers but also less expensive for the company.

During the quarter, Rent the Runway launched six new exclusive collections, with plans for almost 20 such partnerships this year, on track to becoming 60% of the company’s product acquisition mix this year. The company is aiming for those exclusive to become two-thirds of its assortment, part of its plan toward free cash flow profitability.

The company still must prove itself but is tapping into the market forces that are stoking the rapidly growing secondhand apparel market.

Rent the Runway revenue doubles in Q1