"Where did you rent that?"

The rental fashion market continues to explode, as people emerge from COVID hibernation eager to socialize and try fresh looks — and avoid the frustration of retail store shortages.

Why it matters: Some factors driving the trend include millennials and Gen Zers feeling comfortable wearing "used" clothes, sustainability concerns around new threads, and the nascent revival of holiday parties.

• "The joy of picking out an outfit is making a comeback," Vogue says.
• The category started with fancy designer clothes and has shifted downmarket — even Rent the Runway, which just went public, now offers more casual stuff (like a Rolling Stones T-shirt).

Driving the news: The number of companies that will rent you a suit, shirt, handbag or pair of shoes — either as a one-off or on a subscription basis — is growing quickly, with new entrants putting their own twist on the business model, like adding plus-size clothing and other categories.

• Wardrobe, which launched in 2019, lets you rent items from celebrities' closets.
• Boldface names who have rented out their clothes include Sports Illustrated model Marquita Pring, Grammy winner Leon Bridges, "Queer Eye" star Antoni Porowski and former Miss Universe Olivia Culpo.
• When you borrow a garment that a star has worn on a red carpet, "it becomes a conversation piece right away, as opposed to that dress from Macy’s," Adarsh Alphons, the founder and CEO of Wardrobe, tells Axios.
• It also takes away the "ickiness" that some consumers feel about clothing that has been worn. "They used to feel less comfortable with items that are not fresh off the rack," Alphons says.

Larger competitors to Wardrobe include Nuuly, which also opened in 2019 and is owned by URBN, parent to Urban Outfitters, Anthropologie, Free People, etc. It's a subscription service that lets customers rent six items a month for a flat $88.

• Some customers quit during the depths of COVID-19 but have since come back, Dave Hayne, CTO of URBN and president of Nuuly, tells Axios.

• Nuuly shifted to more casual clothes when the pandemic struck, but "this past spring, we’ve seen a big transition back to dresses and formal occasion wear," Hayne said.
• "We don’t see apparel rental as a replacement for purchase," he said. The typical customer enjoys the fun of wearing an item without committing to it, and may appreciate the sustainable aspect of reusing clothing, Hayne said.

How it works: Most fashion rental companies pay for shipping and dry cleaning.

The bottom line: A Bain & Company report predicts that "sustainable luxury" will be a trend that evolves over the next decade, with the current crop of clothing rental services as a building block.

• "Person-to-person" fashion rental, in which ordinary folks consign their clothes to intermediaries like Wardrobe, is one possible iteration.
• "Every item is one of a kind," says Alphons of Wardrobe. "Some items are completely booked out until next February."

Go deeper: Gen Z is reinvigorating thrift stores