London-based fashion rental service Onloan, which launched pre-COVID-19 and traded throughout the lockdown, is to put its business on hold from the middle of next month
The decision was made “with great sadness,” according to the company, and the creators, Natalie-Anne Hasseck and Tamsin Chislett, will continue to seek new investment.
According to Hasseck and Chislett, Onloan is poised for growth, with demand outstripping supply, and the objective is to revive the business. Due to the pandemic's impact and problems in acquiring funds, Onloan failed to grow.
Because of Onloan's renting model, potential investors are unable to obtain tax relief through the UK government's Enterprise Investment Scheme. In the United Kingdom, investors can claim up to 30 percent income tax relief on EIS investments, which are intended to reduce the risk associated with investing in small businesses.
The Onloan business is similar to Rent the Runway, but it is entirely digital, with a particular focus on workwear.
Chislett said Onloan’s position was “unique in the burgeoning rental sector, and a UK industry first." They were successful in so many areas, from renting daywear rather than simply occasionwear to our subscription model, which had economics that benefited both the consumer and Onloan. They set out to give clients a means to completely avoid fast fashion, and they heard time and time again that they had succeeded.
She stated that due to the pandemic, income was "up and down" in line with the lockdowns and that without EIS tax exemption, the company was unable to pursue a large chunk of its investment alternatives.
Based on the founders' belief that businesses require cash flow to operate ethically with their own suppliers, Onloan had partial or full wholesale relationships. Prospective investors, according to the creators, cannot claim tax relief because Onloan retains merchandise for rental.
Chislett said the EIS rules need to reform to enable the circular economy, "not just in fashion, but throughout so many sectors. They have no doubt that rental will continue to play an important role in the fashion business in the future. It has become unavoidable in the short time since they debuted. They're delighted to have played a significant role in it.
The site had 35 contemporary designers on board and the founders said that they aimed to "create a system that considers a garment's life cycle from beginning to end." Customers pay a monthly fixed charge to borrow a variety of clothing.
Some of its first brand partners were independent, women-led labels making waves in the sustainability space. Mother of Pearl, Shrimps, Maggie Marilyn, Samantha Cameron's Cefinn, and a slew of Scandinavian labels like Stine Goya, By Malene Birger, Baum und Pferdgarten, and Designers Remix were among them.
Chislett said that they intended to create a paradigm in which people rented on a month-to-month basis. They know they're receiving their fashion fix without reverting to past habits. From the beginning, they noticed that when a consumer reaches three months of Onloan, they look around and realize they haven't really bought much [during that time]. They're paying less and experiencing better clothes without feeling guilty.
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