Urban Outfitters’ Nuuly rental business turns a profit in Q3

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Dive Brief:

  • Nulli, the rental and resale business at Urban Outfitters, helped the apparel conglomerate’s Q3 sales rise 9 percent year-over-year to $1.28 billion. Nuli’s own sale It grew 86 percent or $30 million.The company’s earnings release shows a 68% increase in subscribers compared to last year.

  • Rental unit gross profit doubled year-over-year to $17 million, and gross margin increased 322 basis points to 25.5%, largely due to an increase in monthly subscription fees. Operating income was $300,000, up from a $3 million loss a year ago.

  • The gains were partially offset by higher logistics costs, including costs for a second Nulli fulfillment center expected to open early next year.

Dive Insight:

Nulli It started in 2019 As a subscription rental business, a Option to sell again in 2021. With posted high growth and profitability, Nulli has defied the odds with apparel rentals, online resale and subscription sales.

It has a profit. He escaped a loteven if Not all, online-only clothing sales jobs. Rent the Runway, a clothing rental company that specializes in costumes. yet to make a profit. Last year the company rNearly a quarter are separated from layoffs. of the staff in an effort to reduce costs.

But Nulli doesn’t seem to compare to Rent the Runway. Dave Hein, chief technology officer and president of Nulli, told analysts last week that 60% of new subscribers They have not rented before. Before any company.

“We don’t always see ourselves as stealing shares in the Nulli business,” he said. “We feel that we are developing a new market and renting is a new concept that people need to learn.”

Hein Nulli cites ties to the company’s other brands as key advantages. In November, Unite reached its goal of 200,000 subscribers, he said.

“We’ve partnered with our sister brands Anthropologie, Free People, FP Movement and Urban Outwear, as well as over 400 partner brands, to create what we believe is the most compelling rental apparel category on the market,” he said.

Jefferies analysts called Nulli’s strength the highlight of the quarter. Overall, the company’s net sales rose 9% to $1.28 billion during the period, retail sales increased 7.3%, and retail sales increased 5.6%. E-commerce grew in the high single digits, and same-store sales grew in the mid-single digits, according to a company press release. Wholesale trade fell 3.6 percent.

by brand, Retail comps are up 22.5% on Freelancers. and fell 13.2% at Anthropologie and 14.2% at Urban Outfitters.

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