Nuuly, URBN’s affordable rental business that’s only 6-years-old, continues to be a bright spot for its parent company.
For its fourth-quarter earnings call, reported this week, URBN revealed that Nuuly’s subscriber base jumped by 53% year-over-year to over 300,000 members, adding another 20,000 members. Nuuly has now been profitable for a full year, ending this past fiscal year with a profit of $5.2 million. Its revenue increased by 56% to $113 million this quarter.
For URBN, Nuuly and another newer venture, the 12-year-old activewear line Free People Movement, represent two of the most promising pieces of its portfolio. In the last 12 months, Nuuly’s revenue was $378 million, while Free People’s, which includes both Free People and FP Movement, was $1.46 billion. URBN will rely on these two brands, as well as its top-performing brand, Anthropologie, which brought in over $2 billion last year, to continue driving growth for the whole company. Urban Outfitters is the third biggest brand in the portfolio with $1.2 billion in revenue last quarter. URBN also owns home goods brands Terrain and restaurant collective Menu & Venues.
“Nuuly and FP Movement are two of the most exciting high-growth concepts in the market today,” said Richard Hayne, president of URBN and CEO of Urban Outfitters, during the earnings call. “Both are nicely profitable and both continue to expand brand awareness and demonstrate the potential to scale further.”
For 2025, the URBN team has even loftier goals for Nuuly. URBN announced a public goal to get Nuuly to over $500 million in revenue this year, which it hopes to reach by continuing to focus on new active subscriber recruitment.
Nuuly’s continued success and profitability is a sign of resilience for the rental sector. Fashion rental as a category is on track to grow by an additional $1.16 billion in the next four years, according to data from research company Technavio. The originator of the field, Rent the Runway, has also seen success recently. In earnings reported in December, the company had $75 million in revenue for the third quarter of its fiscal year, a nearly 5% increase from the year before.
In November, Nuuly president David Hayne told Glossy that rental as a sector was like “hiking downhill,” boosted by a favorable economic environment that’s making rental more appealing, especially to young consumers.
In URBN’s earnings call, David Hayne held to the belief that Nuuly is set up for continued success.
“We’re very excited about the momentum that we’ve seen so far in February,” he said. “So we’re very bullish on the year, and we’re looking for some exciting growth this year, as well. We have an internal goal to get this business half a billion this year, and that’s what we’re shooting for. And we think that it’s an achievable goal.”
