Fashion Rental Companies Could Help Save the Planet. There’s a Catch.

Clothing rental companies want you to imagine yourself never buying clothes again. You’d have a largely empty closet and a fashion subscription service that would keep you looking up-to-date and smartly attired.

It’s an appealing concept facing consumers amid a growing awareness of the environmental damage created by the garment industry and a popular movement to minimize, or “Marie Kondo,” one’s possessions.

But can renting your wardrobe actually reduce the industry’s environmental footprint—and yours?

That depends, said Wedad J. Elmaghraby, professor of management science at UMD’s Robert H. Smith School of Business, on the efforts companies make to design, manufacture and transport their merchandise more sustainably.

“The only way that this model will have a positive impact on the environment is if it can go to scale, meaning that a lot of people are using the rental market as the main mechanism for clothing themselves.”

Elmaghraby has spent much of the past decade studying secondary retail markets—those places where clothing and other goods find (or don’t find) their second lives. Lately, she’s been examining the fashion rental market.

The garment industry is the world’s second-biggest polluter, behind only oil and gas. Worse, overproduction means much of it ends up in landfills. While a number of high-end fashion houses are piloting sustainable product lines, they represent only a small share of the overall demand.

“The real environmental impact happens at the mid to lower end. Think H&M and Zara,” she said.

If the mantra is: Reduce, reuse and recycle, then fashion rental services fall into the “reuse” category. That’s laudable, from an environmental standpoint. If a single formal gown is worn by 10 different women to 10 different events, surely that’s better, environmentally, than creating 10 separate gowns to be worn once by each woman (and then stored in 10 separate closets only eventually to be thrown into a landfill).

But scaled up to everyday clothing, is it better that 10 women or men order five work-appropriate outfits to wear each week along with casual outfits, then ship it all back to the company to be cleaned and re-rented, and repeat the process week after week? Or is it better that those 10 women or men buy outfits made in a sustainable way and wear them for as long as possible?

Little is known about what happens to the clothes in a rental fashion service. How often are they worn before they’re retired? How often are they shipped? And where do they go next for their second lives?

Because none of the services are publicly traded (there’s speculation that New York-based Rent The Runway might be the first to IPO), the companies are closely guarding their data.

Only then, Elmaghraby says, will the environmental advantages (clothes in rental rotation are worn far more often than ones that compete for attention in one’s own closet) outpace the disadvantages (the transportation footprint and the footprint of the clothes that don’t get rented). Getting there could take years.

Today, companies on the fashion scene are all looking to be the most accommodating, the simplest to use.

“These companies are really trying to gain market share, so they are telling customers, ‘Take it! Wear it once, and ship it back to us. You don’t have to ship everything in your basket, you can ship it one item at a time,’” Elmaghraby said.

But doing that adds up to a lot more shipping—and a bigger environmental impact. Last year, Rent The Runway partnered with WeWork to create more than a dozen parcel drop-off and pickup spots. It has a similar partnership with Nordstrom.

“They want to be able to say they are good for the environment, but they know in all honesty, they cannot say that until it becomes a habit for people to rent clothing on a large scale.”