{"id":17929,"date":"2024-02-23T10:39:25","date_gmt":"2024-02-23T09:39:25","guid":{"rendered":"https:\/\/dress-ecode.com\/?p=17929"},"modified":"2024-02-23T10:42:43","modified_gmt":"2024-02-23T09:42:43","slug":"mango-and-brands-investment-in-clothing-rental","status":"publish","type":"post","link":"https:\/\/dress-ecode.com\/en\/mango-and-brands-investment-in-clothing-rental\/","title":{"rendered":"Mango and brands’ investment in clothing rental"},"content":{"rendered":"

\"\"<\/a>In March 2023, the online press reported the investment of the fast fashion brand Mango in clothing rental. In fact, the large fashion company has started a pilot test called “Mango Renting” to enter the rental business, investing in the La M\u00e1s Mona platform. With this initiative, the Spanish clothing giant offers customers the opportunity to borrow a limited selection of its garments: 40 items updated monthly, with prices ranging from 30 to 36 euros. You select the dress, choose the delivery date and schedule the collection within 4 days at the original delivery address or another chosen by the customer.<\/p>\n

Mango started this pilot test with the aim of offering greater versatility in the use of its collections. This approach harks back to La M\u00e1s Mona’s successful business model, highlighting the importance of flexibility and accessibility in fashion.<\/p>\n

La M\u00e1s Mona\"\"<\/span><\/h5>\n

La M\u00e1s Mona, a Spanish clothing and accessories rental platform, was chosen as the recipient of financial support and mentoring from Mango professionals. Founded in 2012, La M\u00e1s Mona has a business model aimed at both end consumers and businesses. It has 315,000 registered customers and 35,000 rented items.<\/p>\n

In 2020, the company’s plans included opening a franchise in Mexico with a local partner and additional stores in Spain. At the time, the company’s goal was to have twenty physical stores by 2023, later postponed to 2025. In 2021, La M\u00e1s Mona recorded sales of 350,000, 43% less than in 2019, when it had risen to 620,000 euros. During the pandemic, the company’s sales plummeted to 150,000 euros.<\/p>\n

In 2022 La M\u00e1s Mona planned to further expand the range of its services with the introduction of a new type of subscription: LMM Daily. It is an innovative subscription model focused on renting clothing for everyday use. Polo Villaamil, founder and CEO of the company, expressed hope that this new model would gain further popularity and that the share of online sales would increase up to 50% (source Modaes). The company had already attempted to normalize the concept of clothing rental in 2020, shortly before the onset of the pandemic, through the launch of a catalog of products suitable for everyday clothing.<\/p>\n

The company planned to raise 500,000 euros through private investors and shareholders and increase physical stores locally. “Spain is a very interesting country and we still have a lot to grow in this market,” the manager told Modaes.<\/p>\n

Furthermore, in 2022 the company decided to make a strategic change: from a model aimed at the end customer to renting-as-a-service, i.e. a rental service to third parties. By orienting its strategy towards the professional sector, La M\u00e1s Mona hoped to increase its revenues by 185%, up to one million euros by 2023. \u201cWe want to promote a new model of consumption in society and for this brands must commit and start offering clothing rental. The more brands start renting, the better it will be for all of us,\u201d Villaamil explained to Modaes.<\/p>\n

In March 2023, the change in strategy was validated by an agreement with Mango, which invested in the company with a convertible equity loan via Mango StartUp Studio.<\/p>\n

\"\"The clothes rental and the brands<\/span><\/span><\/h5>\n

In the 19th century, especially in European cities such as London and Paris, a clothing rental market developed, mainly aimed at the upper social class. People rented high fashion dresses for events such as balls, theaters and ceremonies. In the following years, with the advent of fashion maison and the growth of the middle class, clothing rental spread even among people with more modest incomes, becoming a more common practice for special occasions such as weddings, parties and formal events.<\/p>\n

Today, clothing rental has become popular again thanks to the increase in interest in sustainability and the evolution of digital technologies, which have made online rental services more accessible and convenient. This has led to the emergence of numerous platforms and companies specializing in the rental of clothes for a wide range of occasions.<\/p>\n

There are some fashion brands that, in addition to producing clothing, also offer rental services. Here are some examples:<\/p>\n

    \n
  1. Ganni:<\/strong> In addition to selling clothing, the Danish fashion brand has started a rental service called “Ganni Repeat,” which allows customers to rent clothes for four days at a time.<\/li>\n
  2. Bloomingdale’s:<\/strong> The US department store, known for its large selection of high-quality fashion brands, also offers a subscription called “My List at Bloomingdale’s” alongside the sale. Customers can thus rent dresses for special events or for everyday use.\"\"<\/li>\n
  3. MUD Jeans:<\/strong> committed to sustainability, the Dutch brand rents out its jeans for 12 months. Once the year has passed, you can decide to keep the jeans or exchange them for a new pair. Returned jeans are repaired or recycled.<\/li>\n
  4. H&M:<\/strong> The Swedish fast fashion brand has also started rentals (in Sweden, the UK, the Netherlands), following a test in 2019. H&M Rental allows members to borrow items and book a personal consultation with a stylist in shop.<\/li>\n<\/ol>\n

    Other brands, including luxury ones, choose to collaborate with existing platforms instead of directly including the renting service.<\/p>\n

    Mango StartUp Studio: the investments<\/span><\/h5>\n

    Mango Renting is one of the investments of Mango StartUp Studio: Recovo, Payflow and Ziknes architectural 3D printing are other start-ups financed by the Spanish group.<\/p>\n

    There are several reasons why a fast fashion brand like Mango might decide to invest in startups. Here are some reasons:<\/p>\n

      \n
    1. Innovation:<\/strong> Startups often bring fresh and innovative ideas to the fashion industry. Investing in startups allows a brand like Mango to stay at the forefront of emerging trends and adopt new technologies or business models to improve its offering.<\/li>\n
    2. Sustainability:<\/strong> Many startups in the fashion industry focus on environmental and social sustainability. Investing in these startups allows Mango to address growing consumer concerns about the environmental impact of the fashion industry and develop more sustainable practices within its business.<\/li>\n
    3. Diversification:<\/strong> Investing in startups offers Mango the opportunity to diversify its activities and expand into new sectors or market segments that may be outside its traditional core business.<\/li>\n
    4. Access to talent and resources:<\/strong> Partnering with startups can give Mango access to innovative talent and resources that may not be available internally. This can help the company develop new products, services or marketing strategies.<\/li>\n
    5. Competition:<\/strong> In an increasingly competitive market, investing in startups can be a way for Mango to differentiate itself from competitors and maintain its leadership position in the fashion industry.<\/li>\n<\/ol>\n

      \"\"<\/strong><\/p>\n

      Is it possible that investing in startups in sustainability-related activities is perceived as greenwashing?<\/strong> Let’s think for example of the case of Mango.<\/p>\n

      Yes, if it is not supported by concrete and significant actions to reduce the overall environmental impact of the fast fashion brand. Greenwashing occurs when a company exaggeratedly or deceptively promotes its sustainable practices in order to improve its brand image without actually making significant changes in how it operates.<\/p>\n

      If Mango invests in startups that promote sustainability without taking concrete steps to reduce the environmental impact of its supply chain, production and consumption of its products, then it can be considered greenwashing. It is important to evaluate the brand’s overall commitment to sustainability and verify whether investments in startups are supported by concrete and transparent actions. However, it is true that large size and large-scale production can make it more complex for a brand like Mango to be seriously committed to sustainability.<\/p>\n

      What happened one year later?<\/span><\/h5>\n

      In March 2023 the news of the investment in renting bounced around various news sites with fanfare and then got lost on the internet. No subsequent mention of the pilot project, other than the news on the closure of the La M\u00e1s Mona business given by Modaes in October 2023.<\/p>\n

      Clothing rental hasn’t found its place yet. The impact of the pandemic and the difficult scalability of the business led La M\u00e1s Mona, a pioneer of this model in Spain, to pause its business. The company has closed its online store and physical stores with the exception of the one in Valencia, which operates under a brand transfer contract.\"\"<\/p>\n

      \u201cSince Covid-19, the dress code of wedding guests has changed a lot, many prefer to buy their own look by finding very convenient alternatives,\u201d Polo Villaamil, founder of the company, tells Modaes. \u201cWe remain convinced that circular fashion will grow greatly in the future and we are now rethinking our strategy for the future.\u201d<\/p>\n

      Mango Renting ceased operations last summer. After a few months after launch. Lots of hype about the opening, little news about the closure. What happened?<\/p>\n

      Ann Taylor’s Infinite Style and Banana Republic’s Style Passport rental services are also gone.<\/p>\n

      The profitability of rental<\/span><\/h5>\n

      According to Modaes, the global clothing rental market has grown by 89.3% since 2016, reaching a volume of $4.9 billion in 2022. The forecast calls for growth to accelerate in the coming years, reaching $10 billion in 2026 (source Global Data). Volume rose from $4.7 billion in 2019 to $5.87 billion in 2022, with a forecast of $7.45 billion in 2026, according to Statista.<\/p>\n

      Considering only the online market, according to Skyquest, clothing rental growth is expected from 1.23 to 2.56 billion dollars by 2031. Similar estimates are those of Mordor Intelligence, shown in the graph below.<\/p>\n

      \"\"Consulting firm Bain estimates that rental will account for 10% of a leading luxury brand’s revenue in 2030 and that an item typically rented 20 times will generate a profit margin of 41% (LuxCo 2030). For Common Objective, there is a lack of certain data on market trends and, therefore, the possibility of evaluating its commercial validity. Offering rental services, in addition to the revenue stream brands can test the durability of their garments through multiple uses and the longevity of the style outside of the original selling season. Many companies wait and see how the leaders behave in this direction.<\/p>\n

      Sustainability pressures, the climate crisis, growing environmental awareness, economic recession and uncertainty can:<\/p>\n

        \n
      • influence consumer behavior<\/strong>, pushing them to look for cheaper and more sustainable alternatives to satisfy their fashion needs. This could lead to greater acceptance of more circular and shared consumption models and an increase in the adoption of clothing rental. Borrowing becomes a more attractive choice for consumers looking for more affordable options, providing opportunities for rental platforms to grow and thrive.<\/li>\n<\/ul>\n

        \"\"<\/p>\n

          \n
        • push fashion companies to quickly adapt to changes<\/strong> in consumer preferences and the economic environment. This could mean developing new business strategies, partnering with existing rental platforms, or launching internal rental initiatives to stay competitive and relevant in the market.<\/li>\n<\/ul>\n

          In the era of unbridled consumerism, where clothing is often considered an ephemeral good, clothing rental is an act of rebellion against the “disposable” culture. Will the fast fashion companies, promoters of this culture, be credible in proposing the choice of rental, showing that they are not just pursuing profitability, but that they want to slow down the race for fast production and consumption? And how much will they be able to sustain renting in terms of durability of their garments?<\/p>\n