Its a great market (massive numbers of babies born every year, 4m+ in the US alone) and it is not one that a lot of entrepreneurs automatically think of, so anything that can get traction is clearly going to do fairly well. The problem with this particular model (and this is only from my own personal experience), is that you get baby clothes (both new and old) as gifts for a lot of different sources (friends, family etc) and quickly most parents regardless of household income come to view baby clothes as a disposable or at least very low value commodity and thus renting expensive "boutique" clothes is perhaps moving towards to the "niche" end of the market... although I definitely, think if you kill the execution you could do something that made a bit of money.