Fresh off of record-breaking second quarter results, Urban Outfitters Inc. is forging ahead with a new consignment app that looks to create a marketplace for previously owned products and boost sales for the Philadelphia retailer.
Called Nuuly Thrift, the service will launch this fall with an app and sell women’s, men’s and children’s apparel and accessories. As with any consignment store, Urban will receive a fee from any item that is sold on the platform.
Urban described Nuuly Thrift as the “sister platform” to Nuuly Rent, its subscription rental service that competes with Rent The Runway and other similar outlets.
“Both Nuuly platforms, Thrift and Rent, will support its mission to be a curated destination for anyone who loves fashion and is exploring how to wear, buy and sell it in ways that are gentler on the planet and on their wallets,” said Richard A. Hayne, CEO of Urban Outfitters, during a second-quarter earnings call on Tuesday.
Nuuly Thrift sellers can receive their portion of a transaction into a bank account or receive “Nuuly Cash” and earn an extra 10% on a payout. Nuuly Cash can then be spent back at Nuuly Thrift or at any Urban Outfitters stores.
The hope for Urban Outfitters (NASDAQ: URBN) is that the arrangement creates a "cycle of buying and selling within the company's brands." The system also is one way to try to prevent Urban from cannibalizing sales of new items from its other brands by providing the option for the Nuuly Cash to be spent directly on Urban products.
Urban has competition in the resale market as other retailers and services have sought to capture a portion of this segment. Poshmark Inc. and the RealReal are secondhand market platforms that sell designer items while Lululemon Athletica established in April a resale marketplace for its used apparel. Nuuly Thrift will allow sellers to hawk items that are not Urban Outfitters brands.
Urban's sales for the second quarter that ended July 31 swung to a record $1.16 billion. That is a 20.3% increase compared to the same period in 2019, which Urban said was more comparable than the second quarter of 2020 when the company was plagued by store closures caused by the Covid-19 pandemic. Income for the second quarter came in at $127 million, or $1.28 a diluted share, which was also a record for the company.
