U.K. Dragons Take A Bite Of Fast-Growing Clothing Rental Market
Charlotte Morley, founder of kids clothing subscription thelittleloop, became the first woman to double her investment request on the BBC Dragons’ Den last week, when two multi-millionaire investors Deborah Meaden and Steven Bartlett pledged approximately $100,000 each to back her business.
Her proposition, a subscription for parents that allows them to rent ethical, sustainable kids clothes at around a third of the price of buying them new, received an enthusiastic response from the Dragons. Bartlett went as far as saying that her business model captured a movement towards a more sustainable way of living that was “inevitable.”
He had good reason for that claim, with forecasts suggesting that the worldwide clothing rental market could hit $7.45 billion by 2026, nearly double where it stands today.
Rental hits the mainstream
Morley, speaking via video call, explained how the opportunity to pitch to the dragons was “too big to miss.” Despite the rapid growth in the rental model, and the high profile IPO of fashion subscription service Rent the Runway, the rental market is considered by many to be in its infancy, with low consumer awareness of its benefits.
“To be able to go on national television with a four million person audience was such a great opportunity to try and get more people to understand the circular economy, and to bring the rental model into the mainstream” she explains.
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“There’s been a real marked shift in consumer attitudes towards rental. In certain verticals, for example occasion wear, it’s already well established, even de rigueur.” The unique aspect of thelittleloop model is that the service provides rental clothing for everyday wear which Morley sees as having the potential to be “huge.”
“We’re building a system, which could genuinely replace fast fashion, which could give you all of the clothes that you need, at a price that’s comparable with fast fashion, but you’re getting ethical, sustainable clothes without the waste.”
Consumers are demanding change
Many factors are behind the rapid growth of the apparel rental market, such as the ongoing development of the low-cost technology needed to track the movement of clothing along it’s rental journey. For example, thelittleloop uses QR code labels in the clothes to maintain a unique record of that garment’s travels.
One of the biggest factors, however, is the growing demand from consumers themselves for more sustainable solutions to the social and environmental impact of the fashion industry.
“60% of consumers now say that they consider sustainability when they’re thinking about what they buy,” Morley explains. “Yes, fast fashion is still king. But people are becoming more and more aware of the environmental price we pay. And the bottom line is, the planet literally can’t do it, we don’t have the resources to keep producing clothing at this rate.”
Additional rental benefits
With sustainability as the driving factor or “north-star” for thelittleloop, Morley is evangelical about the other benefits that rental can offer as opposed to traditional methods of retail.
“It starts with sustainability,” she adds, “but I think other benefits of the rental will increasingly become more important. Renting has the potential to be much more convenient than shopping. It’s a system which is designed to be seamless, this idea of swapping, and always having only what you need.”
Focusing on the space-saving aspect, Morley adds: “we have a house, but it’s not massive, we don’t have a huge amount of storage space. Where do you keep extra clothes between children? Where do you keep them after the first child while you’re waiting to use them for the second?”
In addition, rental allows a sense of discovery for subscribers. “You can have fun. I get to go on the website and pick ten unique and interesting items for my children which is an enjoyable experience.”
Running a rental business is not without it’s challenges, as Morley explains: “it’s much harder to run the logistics of a rental business than it is to run a resale or conventional ecommerce business.”
But with two high profile investors on-board and a $200,000 injection of cash, the next step for thelittleloop is pursuing higher growth and reduced costs that come from scale. Speaking of her new investors, she adds: “They’re just so kind. They are really thoughtful and they want to help. I feel incredibly lucky to have got them on board.”