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How Nuuly Stole the Show From Rent the Runway; Ulta and Target Call Off Their Partnership; Why Cheap Airline Seats Are Getting Harder to Find
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Good morning. Today, a latecomer to online clothes rental takes the spotlight, a major retail partnership fizzles out and the window to buy a cheap plane ticket starts to close.
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Inside a Nuuly warehouse in Levittown, Pa. Photo: Michelle Gustafson for WSJ
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Rent the Runway might have introduced young consumers to the idea of renting their wardrobes, but Nuuly seems to be the one that is actually making it work, Meg Tanaka writes.
Rent the Runway, which started in 2009, is struggling to maintain momentum. Despite recently reporting the highest quarter-ending active-subscribers in its history, it still hasn’t managed to turn a consistent profit. Revenue fell to just under $70 million in its fiscal first quarter ended in April, down more than 7% from a year earlier.
Nuuly, which started in 2019, is a subscription-based clothing rental service owned by Urban Outfitters Inc., the parent company of such brands as Urban Outfitters, Anthropologie and Free People. Revenue topped $124 million in its latest quarter, up nearly 60%.
Nuuly benefits from buying inventory alongside Urban Outfitters’ other brands at cost, and nearly half of its items come from sibling brands.
“Rental only works if you already have scale,” said Simeon Siegel, former retail analyst at BMO Capital Markets. “Urban Outfitters could afford the upfront investment and had the supply chain expertise to do it right.”
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Content from our sponsor: Deloitte
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Order Up: How AI Is Delivering for Restaurants
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AI is already proving its value in the restaurant industry, with early benefits in customer experience and inventory management. Identifying scalable use cases remains a challenge. Read More
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Target set aside 1,000-square-foot sections in some stores for Ulta products as part of its deal with the cosmetics brand. Photo: Arriana McLymore/Reuters
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Ulta Beauty and Target won’t renew their partnership when it ends in August 2026, ending a deal that set aside real estate for the cosmetics brand in some of the chain’s stores since 2021, Nicholas G. Miller and Denny Jacob report.
The pact had given Ulta a way to expand its customer base at a time when Covid-19 had shuttered its own stores and reduced demand for beauty products. For Target, the move offered higher-end cosmetics to its lineup, providing an opportunity to increase the value of its average basket.
But Target has been on a cold streak, posting around 10 quarters of flat or falling sales, with some shoppers turning to rivals they think have lower prices or better selections.
Ulta said in April that it would pause opening additional locations with Target and try to make the partnership more efficient.
More beauty: Why some people say e.l.f. Beauty’s new ad with comedian Matt Rife isn't a good look. [Fast Company]
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“We can’t send a press release out that says, ‘This song is viral.’ But we could say, ‘We’ve got a new music video, also, by the way,
did you know that it is in the top 30 of the TikTok chart?’”
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— Sub Pop Records Co-President Tony Kiewel on one reason the music industry increasingly makes videos for songs that came out years or even decades ago. Examples this year include “Psycho Killer,” “Rock the Bells” and “The Skin of My Yellow Country Teeth”
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Airlines have discovered the limitations of deep discounts. Photo: Ethan Gulley for WSJ
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Airlines are working to claw back pricing power by shrinking their coming schedules after cutting rates to fill seats when consumers cut back on flying, Alison Sider reports.
Airfares rose 4% on average in July from the prior month, according to seasonally adjusted federal data, the first such increase since January. Fares in July were also higher than the same month a year earlier.
Carriers have started to see the limits of deeply discounted promotional offers, Frontier Airlines CEO Barry Biffle said. Deals can juice sales, but not enough to cover costs like taxes and airport fees, he said. The airline is now seeing double-digit percentage increases in revenue per passenger.
“I think the industry has figured out that 79 [dollars] is the new 49 and 99 is the new 79,” he said on Frontier’s quarterly earnings call earlier this month.
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Consecutive games the Milwaukee Brewers had to win to trigger a free-burgers-for-everyone promotion at restaurant chain George Webb. After the team hit that rare mark on Wednesday, George Webb said it will give out the burgers Aug. 20 from 2 to 6 p.m.
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The Apple Watch is getting one of its selling points back. Photo: Katharina Kusche/Zuma Press
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Apple is bringing back the blood oxygen feature for some models of its Watch nearly two years after a bruising patent dispute forced it to remove the capability. [WSJ]
LA28 became the first Olympic Games to sell naming rights for its venues, starting with the temporary Comcast Squash Center at Universal Studios and a deal to let the Honda Center in Anaheim keep its name during competition. [Sports Business Journal]
Coca-Cola-owned chain Costa Coffee is expanding partly through hundreds of “barista in a box” vending machines in locations like hospitals, college campuses and hotels. [Restaurant Business]
Disney’s new kids meal comes from La La Land Kind Cafe, a chain that provides internships to young people who have been in foster care. [Adweek]
EBay is returning to Fashion Month with runway shows of “pre-loved” clothes in New York and London. [WWD]
Florida plans to open a second state-run immigration detention center, this one branded “Deportation Depot.” [WSJ]
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