Borrow clothes, save the planet? The reality of fashion rental

Clothing rental has been pitched as a way to curb the fashion industry’s massive environmental impact. But so far, many of these ventures haven’t lasted long.

What could make this idea work? It turns out that focusing on a specific market and building strong relationships with suppliers could be the key.

A recent study investigated whether clothing rental is a possible solution to the fashion industry’s footprint. The research was led by Chalmers University of Technology, along with experts at the University of Borås and the research institute RISE.

The team explored what has and hasn’t worked for companies trying to make renting clothes a practical, long-term business.

Rental clothes and sustainable consumption

The fashion industry is one of the top contributors to global pollution. In Sweden alone, over 90% of the climate impact from clothing comes from newly produced garments.

Renting instead of buying could keep clothes in circulation longer and reduce the need for constant production.

“Many people have clothes hanging in the closet that are rarely or never used. Renting clothes can extend the use of each garment and thus contribute to more sustainable consumption,” said study co-author Professor Frida Lind.

Types of fashion rental models

The researchers examined nine Swedish clothing rental companies. Some were still active, while others had shut down. Through this, they identified three common types of rental models.

The first model is membership-based. Customers sign up and borrow clothes for a set period of time, similar to how a library works. These companies were often founded by individuals who were driven by an interest in sustainability.

The second approach is subscription-based. In this model, customers pay a monthly fee and receive a rotating selection of garments to wear. Companies using this model usually aimed to expand quickly and attract investors.

The third model focuses on individual rentals. These businesses typically offered clothing for specific purposes – such as renting out ski jackets along with ski equipment – creating a bundled, purpose-driven experience.

Why fashion rental companies struggle

Despite genuine interest from consumers, many of the businesses struggled to stay afloat.

“What struck us was that it seemed so difficult for them to make their business profitable. Several had had to end their investments for various reasons,” said Professor Lind.

Running a clothing rental service involves multiple layers of effort. Every garment needs to be returned, cleaned, inspected, and prepared before it can be sent out again. This process is time-consuming and costly.

Many companies also had high overhead expenses related to storage, transportation, and laundry. For those using a subscription model, raising early-stage investment proved difficult.

The researchers found that most of these models simply require more time and support to take root in the market.

“Renting out clothes involves many steps where each item of clothing needs to be handled and inspected before it can be rented out again, which takes time. Companies also struggled with high costs for warehousing, logistics and laundry, for example,” said Professor Lind.

“Especially for the subscription models, there were also difficulties in obtaining venture capital to be able to survive financially through the first phase of building the company. All this shows that these business models need time to establish themselves in the market.”

Niche markets are more promising

Not all of the business models fared poorly. Companies that targeted a narrow and specific market – such as outdoor gear – had better outcomes, especially when they operated near places where such clothing was needed.

“They seem to have found their niche and seen that there is a specific need that the customer is willing to pay for each time they need to use that type of clothing,” said Professor Lind.

Companies that collaborated closely with clothing designers, manufacturers, and suppliers tended to do better as they gained useful insights that helped improve both product quality and customer satisfaction.

“Rental companies that worked closely with clothing manufacturers and suppliers, such as designers with a sustainability profile, benefited greatly from this as they were able to quickly get feedback on which types of clothing were most popular,” said Professor Lind.

“They also gained valuable information about the quality of the garments, for example if there was something that often broke.”

Why these efforts matter

The researchers didn’t measure the environmental impact of each business model in this particular study. But earlier findings from Chalmers show that 70 percent of a garment’s climate impact comes from production, while 22 percent is linked to the shopping trips consumers make to buy them.

In the U.S., an average person throws away about 81 pounds of clothing per year. In the EU, that number is about 26 pounds per person.

If people buy fewer new clothes and use existing garments for longer, that shift could bring major environmental benefits. And if those changes happen without extra travel emissions – even better.

Changing habits, one attempt at a time

While some of the companies examined for the study didn’t survive, Professor Lind believes the broader effort is still important. She noted that even failed attempts help shift public attitudes around how we view clothing ownership and consumption. They also provide useful lessons for future ventures.

“All initiatives that can contribute to the sustainability transition are important. Not least because they help to change attitudes about clothing consumption and increase knowledge about what can and cannot work,” said Professor Lind.

“Our study can be an important contribution to the fashion industry’s sustainability transition, as it shows the possibilities of new business models in this industry.”

“We hope that it can have an impact on decision-makers who need a basis for establishing incentives and financial motivation for a more sustainable fashion industry.”

The full study was published in the journal Journal of Business and Industrial Marketing.

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