H&M faces a potential structural problem shared by the entire fast-fashion industry too. In October, Morgan Stanley analysts sent a research note to clients arguing mature markets such as the US and Europe may have reached “peak clothing.” For years companies were able to make their clothes cheaper and cheaper, allowing shoppers to keep buying more. Now consumption rates appear to be plateauing. Morgan Stanley believes shoppers are already buying so much clothing they gain less enjoyment from each new purchase.

Rental could help address these issues—if H&M can make the model work. Attracting enough rental customers to make an impact at H&M, which did $22 billion in sales last year (pdf), would likely require getting shoppers to rent more than just party dresses for occasional events. And because of the logistics and dry cleaning, rental can be expensive to operate. “I’d be surprised if you can really make it work as a business model,” Simon Irwin, an analyst at Credit Suisse, told Bloomberg. “I can’t see that the kind of labor cost involved in a rental model at those price points really makes sense.”

H&M says it will use the program to test and learn, making changes as needed.

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