Urban Outfitters and its Nuuly brand, located 25 miles northeast of Philadelphia, are relying on automation to find profit in renting apparel, writes Liz Young for The Wall Street Journal.

A cavernous warehouse in Levittown operated by Nuuly is filled with over 2 million garments hanging on carousels. Each item has a tag linked to its location in a central tracking system to make it easy to find when a customer orders it.

Once an outfit has been chosen, it is brought directly to a worker on a hanger by the automated network of cables that run throughout the 310,000-square-foot facility. The outfit is finally boxed up for shipping.

This investment in automation has helped Nuuly achieve profit for the second time since its establishment in 2019 in an emerging segment of the apparel market that already has a strong following, but also a lot of negative results.

“We knew it would take some time to get to a point of scale where that profit would be really possible,” said David Hayne, president of Nuuly and chief technology officer of Urban Outfitters. “Now that we’re at that point of scale, I think we’re seeing that it is possible.”

Nuuly made $5.3 million in operating income for the quarter ending July 31, up from $2.4 million a year earlier.

Read more about Nuuly in The Wall Street Journal.

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