Many of us are used to walking into a retail store and purchasing clothing on the spot. Sometimes, if we’re not feeling lazy, we’ll even try it on first.
In recent years, more consumers have turned to online shopping as a preferable alternative to shopping in stores. Why drag yourself into a department store or through a mall when you can point and click your way to a new wardrobe?
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Plus, a number of budget-friendly online retailers have upped their fashion game these past few years.
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Though Walmart isn’t an online-only retailer, many people enjoy shopping at Walmart.com so they don’t have to navigate those mammoth stores. Walmart has increased its selection of apparel to tempt fashion-minded customers.
Amazon has also expanded its inventory of apparel across a number of key categories.
It used to be that buying clothing on Amazon was a second-tier option. Now, it’s one that fashionistas applaud.
Fashion giant files for Chapter 7 bankruptcy to liquidate.
Image source: Getty Images
Consumers want the option to rent clothing
Most people aren’t in the market to rent a $20 shirt or $30 pair of pants. But when it comes to higher-end items, it can be advantageous to rent clothing items rather than own them.
Not only can renting be a cheaper option, but it can be a lifesaver for people whose closet space is limited.
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In recent years, a number of big players have embraced the idea of rental services. And CaaStle was a promising name in that space.
CaaStle’s business model was a smart one. The idea was to partner with popular retailers to take their unsold inventory and make it available to customers on a rental basis.
It was, frankly, a brilliant solution to the problem of excess inventory.
Unfortunately, CaaStle has been mired in scandal this year. On April 1, CEO Christine Hunsicker resigned from her position after being accused of mishandling and misrepresenting funds.
The company, under Hunsicker’s leadership, managed to lose roughly $530 million in funding it had previously secured. Hunsicker is being accused of defrauding investors, with lawsuits pending.
CaaStle files for Chapter 7 bankruptcy amid scandal
Less than three months after Hunsicker’s departure, CaaStle has filed for Chapter 7 bankruptcy. The company plans to liquidate its remaining assets rather than reorganize and attempt to stay in business.
The company reportedly had $10 to $50 million in both assets and liabilities at the time of its filing.
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It’s expected that once CaaStle’s assets are sold off, there should be some funds remaining to pay unsecured creditors.
Given recent events, this news isn’t surprising. Earlier this spring, a letter from CaaStle’s board to shareholders accused Hunsicker of giving investors “misstated financial statements and falsified audit opinions.”
Now, Hunsicker is being compared to the likes of Elizabeth Holmes and Bernie Madoff — big names in the business world who have become synonymous with fraud.
But while things don’t look too promising for CaaStle, this doesn’t mean consumers have to kiss the clothing rental concept goodbye.
More retail:
- Walmart CEO sounds alarm on a big problem for customers
- Target makes a change that might scare Walmart, Costco
- Top investor takes firm stance on troubled retail brand
- Walmart and Costco making major change affecting all customers
The reality is that a lot of people are eager to conserve both funds and space, and renting apparel meets both goals.
It’s likely that another company will be able to come in and build on CaaStle’s big idea – but perhaps without all of the cheating and fraud that pretty much blew the company up.
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