Business Overview

A formal wear rental business is a company that buys expensive suits, dresses, and accessories and lends them out for important events, such as proms and weddings. A tuxedo or wedding dress is an expensive thing to buy for an event that only takes place once in a lifetime. While formal wear can technically be used again, it is likely to sit in a closet for many years to come. Rental wear businesses are excellent investments because even when money is tight, people still tend to spend money for special occasions. While the industry does face threats, like cheap, inferior suits made overseas, the market is still projected to grow over the next few years.

Who is this business right for?

The best owners will be those who understand formal attire and current trends in formal wear. Sizing, fashion, and customer service will all play major roles in how successful an owner is. Entrepreneurs do not necessarily need to be a tailor, but it helps to understand how the alterations process works.

What happens during a typical day at a formal wear rental business?

Owners are generally in charge of overseeing all operations, including:

  • Selecting and purchasing items to rent
  • Managing employees
  • Sizing customers
  • General sales floor duties
  • Setting prices (including specials during busy times)
  • Promoting different uses for formal wear (e.g., job interviews)
  • Determining and recognizing new trends in formal wear

What is the target market?

The ideal client is someone who understands they’re not going to wear an expensive suit or dress enough to justify its full cost. You want parents looking for suits and dresses their kids will grow out of immediately, high school students who can’t spend thousands on one dance, and hard-working people who need formal wear for big job interviews and weddings.

How does a formal wear rental business make money?

Companies make money by renting formal wear at a comfortable profit margin. An average tuxedo may cost around $1,000, and the average tuxedo rental is $196. After just 10 rentals, the suit will have generated around $1,000 in profit (minus the cost of dry cleaning and upkeep.)

What is the growth potential for a formal wear rental business?

There is only so much one brick-and-mortar formal wear rental business can grow, based on the demographics of the town. People generally won’t travel too far to pick up a rental, so you’re somewhat limited to the location you choose.

There are plenty of ways to grow if you choose to franchise. You may either want to choose an established company to franchise from, or you can start your own franchise after the success of your first independently-owned store. There are also ways to rent your clothing online, which can drastically increase your sales.