Investment

Onloan to Pause Business as Founders Seek Investment – WWD

LONDON — Fashion rental subscription service Onloan, which launched pre-COVID-19 and traded throughout lockdown, is putting the business on hold as of mid-March.

The company said it made the decision “with great sadness” while the founders, Natalie-Anne Hasseck and Tamsin Chislett, will continue to seek new investment.

Hasseck and Chislett said Onloan is poised for growth, with demand outstripping supply, and the hope is to revive the business.

Onloan struggled to grow due to the impact of the pandemic, and to difficulties in raising money.

Due to Onloan’s rental model, potential investors cannot claim tax relief from the U.K. government’s Enterprise Investment Scheme. In the U.K., investors can claim up to 30 percent income tax relief on EIS investments, which is meant to mitigate the risk associated with funding small companies.

The Onloan model mirrors that of Rent the Runway but is fully digital with a particular focus on workwear.

Chislett said Onloan’s position was “unique in the growing rental market, and a U.K. industry first. We made a success of so many things, from renting daywear instead of just occasionwear, to our subscription model with economics that worked well for both the customer and for Onloan. We set out to give customers a way to give up fast fashion entirely, and we heard over and over again that we had succeeded.”

She said the pandemic meant that revenue was “up and down” in line with the lockdowns and that, without EIS tax relief, a huge portion of investment options were unavailable to the company.

Onloan had partial or pure wholesale partnerships, based on the founders’ view that brands need cash-flow to act ethically with their own suppliers. The founders said because Onloan holds inventory for rental, prospective investors cannot claim tax relief.

Chislett said the EIS rules need to change to support the circular economy, “not just in fashion, but across so many sectors. We’ve no doubt rental will be a major part of the fashion industry going forward. In the short time since we launched, it has become an inevitability. We’re proud to have played a big part in that.”

The site had 35 contemporary designers on board and the founders said they wanted to “build a system that considers a garment’s life cycle from beginning to end.” Customers pay flat monthly fees to borrow a range of clothing.

Some of its earliest brand partners were independent, women-led labels that were making waves in terms of sustainability. They included Mother of Pearl, Shrimps, Maggie Marilyn, Samantha Cameron’s Cefinn and an array of Scandinavian labels such as Stine Goya, By Malene Birger, Baum und Pferdgarten and Designers Remix.

“We wanted to build a model that meant people were renting month-on-month. They know they are getting their fashion fix without having to slip into old habits,” Chislett said.

“From early on, we saw that as soon as a customer hits three months of Onloan, they look around and realize that they haven’t really bought very much [during that period]. They’re spending less and experiencing better clothes, without the guilt.”




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