After shuttering an earlier version, Nuuly is launching a thrift shop
Nuuly, the clothing rental platform owned by Urban Outfitters, Inc., is offering customers the chance to buy final-sale, as-is styles from brands like Maeve and Pilcro via its new Thrift Shop, Modern Retail has learned.
The service — which Nuuly flagged in a message to members earlier this month — is limited to current subscribers and available on Nuuly.com. Subscribers can purchase up to five items at a time from the Thrift Shop, per Nuuly’s terms and conditions. The styles ship free with people’s next Nuuly orders and do not count towards customers’ six or more monthly rentals. Notably, all items in Nuuly’s Thrift Shop are available to rent as well as buy.
Nuuly’s new Thrift Shop is similar in name but different in structure from Nuuly Thrift, a peer-to-peer marketplace it rolled out in 2021. Nuuly Thrift, which was quietly shuttered earlier this year, operated as its own app in which shoppers could buy and sell gently-used apparel and accessories belonging to any brand. The new Thrift Shop is limited to Nuuly’s inventory only, and it does not function as a peer-to-peer model.
Pieces in Nuuly’s Thrift Shop are discounted in the double digits, often 50% to 70%. For example, a Marion Mini Dress from Naya Rea is listed at $84, down from $280, and a Sequin Shine Shirt from Anthropologie is going for $54, down from $150. Nuuly promises that customers will see all prices upfront and “can expect Thrift Shop garments to be in the same condition as rental styles.”
Nuuly’s Thrift Shop is “all product that we’ve deemed is good for rental and could easily go to a customer,” Kim Gallagher, Nuuly’s executive director of marketing and customer success, told Modern Retail. “It might be something that, for example, we feel like we bought a little too much of, or just [are] anticipating that maybe we won’t want it next year, so we should start to bring down the inventory level now,” she said. “There are all different reasons, but it’s all stuff that’s in great condition.”
In one way, Nuuly’s Thrift Shop introduces a new pathway in Nuuly’s life-after-rent process. Typically, Nuuly says it upcycles items or sends them to one of its sister brands (Anthropologie, Urban Outfitters and Free People) to be “professionally cleaned and repaired” and then resold at a discount. Thrift Shop keeps this process directly in-house for Nuuly. “It’s the first stop of how we would prefer to sell a product before we go through other partners and channels,” Gallagher said. Thrift Shop also enables Nuuly to court customers from other resale platforms.
Nuuly is rolling out Thrift Shop at a time of strong growth for the company. According to Urban Outfitters, Inc.’s latest earnings, Nuuly reported $90.7 million in quarterly net sales for the three months ending in July, up 62.6% from the same time a year ago. That spike was “primarily driven by a 55% increase in average active subscribers in the current quarter versus the prior year quarter,” a press release stated. Nuuly also opened a new fulfillment facility in Kansas City, Missouri, in February. It reached profitability last year.
Nuuly, which launched in 2019, had more than 250,000 active subscribers at the end of its last quarter. Its members pay $98 a month for six pieces that they can wear and then send back. However, if subscribers want to keep an item included in their monthly rental haul, they can buy it piecemeal for a discount, “sometimes up to 75% off [the] retail price,” according to Nuuly. This offer remains going forward, even with the addition of Thrift Shop.
Jessica Ramírez, senior research analyst at Jane Hali & Associates, told Modern Retail that Nuuly stands to benefit by limiting Thrift Shop to paying subscribers. “I can’t imagine it’s a lot of product, but it’s product they already own,” she said. “So, in their bubble, it makes sense… But the secondhand market, even though it’s grown, is difficult because it’s so competitive.”
Indeed, the secondhand market has ballooned in the last decade by attracting shoppers interested in saving money or lessening their environmental footprint. Globally, ThredUp predicts that the secondhand apparel market will reach $350 billion by 2028, up from $197 billion in 2023. Still, even as demand surges, platforms like Poshmark, ThredUp and The RealReal have had to battle headwinds like shifts in consumer spending. If Nuuly’s Thrift Shop is a success, it could rattle competitors even more.
Nuuly, for its part, says it hopes to grow Thrift Shop, although it acknowledged that stock is limited based on what inventory is available. “We’re still very early days, but as we see what sells, we definitely will have plans to replenish the merchandise accordingly,” Gallagher said.