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URBN clothing rental service Nuuly to add fulfillment center

Nuuly saw 150% growth over the holidays.

a rendering of Nuuly's fulfillment center

Nully has a new fulfillment center coming online. (Courtesy photo)

URBN is opening a new fulfillment center in Missouri for its apparel rental brand.

The news: The parent of Urban Outfitters will open a new fulfillment center in Raymore, Missouri. It will provide logistics for clothing rental brand Nuuly, which is a subscription service offering more than 15,000 styles from more than 300 brands.

What are the details?

The 604,000-square-foot facility is set to become the second U.S. fulfillment center for the brand, and also the second for URBN in the Kansas City region.

It represents a $60 million investment that will create 750 jobs in five years for the region.

The new facility will be located at Raymore Commerce Center, which was developed by VanTrust Real Estate.

Key quote: "Nuuly has experienced significant growth since our launch in 2019. We are excited to open our second U.S. fulfillment center to support our next phase of growth, and proud to work with the State of Missouri and the City of Raymore to bring new jobs to the Kansas City region," said Dave Hayne, Chief Technology Officer of URBN and President of Nuuly, in a statement.

Nuuly momentum: It comes after URBN released data showing Nuuly segment sales during the two holiday months increased 150% due to a 153% increase in subscribers as compared to the 2021 holiday season.

What it shows

Rental growth: URBN has a portfolio that includes apparel brands such as Urban Outfitters, Anthropologie and Free People. Each of those are centered sales of new items. With Nuuly, it is layering in rental, as well as resale with the recently launched Nuuly Thrift. This opens up an avenue for clothes to be worn by one user, then recirculated. It also provides a subscription offering that creates recurring touchpoints (and revenue) with consumers. It’s a different approach for URBN, reflecting that the company is offering not only responding to demand for variation in what people want to buy, but how they want to buy it.

Owning the supply chain: Rental is a unique model that requires not only packing and shipping orders to go out, but also receiving them and preparing clothes to be worn again. Fulfillment is a particularly important part of the equation, and finding efficiency through processes and software is the avenue through which to build a profitable business. Given this, there are advantages to owning a fulfillment center as opposed to working with a third-party logistics provider.

Missouri as ecommerce hub: The new facility underscores that Missouri wants to become a prime location for ecommerce and distribution. Given its positioning in the center of the country, the state positions companies within 600 miles of 135+ million potential customers. A public-private economic development organization called the Missouri Partnership helps to create a friendly environment for businesses.

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