June 2020
Teaching Note
HBS Case Collection

Armarium: Luxury Fashion Brands for Rent

Format:Print
| Language:English
| Pages:26

Abstract

Armarium, a two-sided digital platform that offered consumers the opportunity to rent the most coveted, current season high fashion clothing and accessories from the top global luxury brands, had emerged from its first sales season with two distinct customer segments: the High Net Worth (HNW) woman and the High Earner, Not Rich Yet (HENRY) woman. As it began to scale its operations, it had to decide which customer segment was the more desirable target market and how to refine the company’s value proposition to maximize value creation for both consumers and the luxury brands that supported the business model. The jury was still out on whether a rental model could attract higher income women who could afford to buy luxury brands and whether it could support the $400 rental price points Armarium would need to charge for its one-of-a-kind pieces with retail values that could reach as high as $15,000. The two founders faced significant scaling challenges, from how to establish guard rails around curation of the collection to go-to-market distribution channel strategy and customer acquisition strategy. Their decisions would determine whether the world’s most desirable luxury brands would agree to work with them.