The idea of a "dressing up" renaissance has been peddled by the fashion industry since the start of the pandemic. The prediction, or at the very least the hope, was that people would tire of being stuck at home in ill-fitting sweatpants and start clamoring to wear something more formal the second that pandemic-related restrictions lifted.
In some ways, this did occur. Rent the Runway (RENT) , the e-commerce platform that lets customers rent designer gowns and other clothing, recently reported a very strong first quarter.
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Are We All Dressing Up Now? Sort Of.
In one year, Rent The Runway's revenue nearly doubled to $67.1 million. That's a $33.5 million increase from where it was last year.
Active subscribers rose by 17% to 82% to 134,998 while gross profit rose by 178% to $22.5 million.
While the platform offers everything from thousand-dollar ball gowns to regular blouses as rentals, the platform is most commonly used to rent a fancy dress for a wedding or another event that necessitates dressing up.
"Black tie is to 2022 as sweat pants were to 2020," co-founder and CEO Jenn Hyman told analysts during the June 10 call. "We are seeing our customers gravitate towards more formal looks with cocktail dresses and gowns having the highest utilization of any category in Q1 and reaching all-time highs."
While it started out by buying dresses from popular designers and offering them as a rentals, Rent the Runway has recently been trying to launch more exclusive collections.
In the last year, the company launched six such collections and plans to have 20 by the end of 2022.
“Rent the Runway is benefiting from the fact that women are using fashion for self-expression as they emerge from covid," Hyman said. "In other words, fashion is bolder than ever. The shorter hemlines, cutout, new trends and colorful clothing women are wearing right now translates into highly cost-efficient customer acquisition for us."
This comes after sales of dresswear, which is generally defined as the dresses, shirts, and pants that one wears to an office or an outing, had plunged 32% year-over-year to $84.6 billion at the height of the pandemic in 2020 while athleisure, a term used to describe sporty-style clothes that can also be worn on the street, rose by 84%.
But Those Sweatpants Are Not Going Away Either
The numbers do show that people have been buying more "going out clothes" as the trajectory of the pandemic shifted -- Madewell, Anthropologie (URBN), and Bonobos (WMT) have all reported seeing dresses and suits sales increase sometime in mid-2021.
But the "dress up" or "dress down" question may not be as much of a binary as some in the fashion industry may have you believe.
Sales of athleisure are also up. Between 2019 and 2022, visits to Lululemon LULU rose by 17.2% in January, 27% in February and 5.8% in March.
Athleta, the athletic clothing subsidiary of the Gap GAP, saw respective increases of 35.5%, 39.2%, and 33.2% in the same months, according to recent data from Placer.ai.
By its definition, black tie is a type of clothing that is worn by a small and wealthy segment of the population for special occasions -- while loosened restrictions have made these occasions more frequent, casual and comfortable clothing is also not going away as the primary choice of clothing for the vast majority of Americans.
Despite occasional fluctuations, the athleisure market is still projected to grow from $155.2 billion in 2018 to $257.1 billion by 2026.
"People love to go to the extremes and say loungewear is dead," Krista Corrigan, an analyst at retail market intelligence firm Edited, told TheStreet in 2021. "It is not dead but I think, undoubtedly, we're going to see an uptick in some of the more formal business casual compared to where we were just a year ago."
