- Customers are increasingly looking to rental services to experiment with new products and mitigate their environmental impact.
- Rental has largely been a North American phenomenon, with a handful of European platforms offering peer-to-peer services.
- New luxury bag rental service Cocoon owns and manages its inventory, which carries high costs but gives it more control.
Rent the Runway popularised designer apparel rentals in the US. Ceanne Fernandes-Wong is hoping to do the same with bags in Britain.
The former chief marketing officer of The Outnet and Vestiaire Collective is launching Cocoon, a London-based luxury bag rental service. For £99 a month, consumers can borrow accessories from over 30 luxury brands, ranging from Dior, Saint Laurent and Bottega Veneta to younger labels like Rejina Pyo and Jacquemus. Users can keep a style for up to half a year, and everything else — delivery, maintenance — is taken care of by the company.
Fernandes-Wong’s past jobs — she was The Outnet’s third employee — exposed her to different models of fashion consumption, which subsequently informed Cocoon. “Back then, discount shopping was a dirty word, but I really believed it was a smart woman’s choice,” she says. “Luxury isn’t just about the latest thing. That’s a point that has stayed with me throughout my career.”
The startup was funded with investment from friends and family and is now formally raising its first round. Cocoon will later explore adding pricing tiers that give customers different levels of access. “Everybody wants something new all the time,” says Fernandes-Wong, who co-founded the platform with entrepreneurs Matt Heiman and Maya Taras-Nelson, and is also chief executive. “We just thought, ‘there has to be a way to do it in a more sustainable way.’”
The concept of renting high-end apparel was popularised by Rent the Runway, which now has a $1 billion valuation. The New York startup was launched in 2009, but it was only recently that rental entered the mainstream, with brands from H&M to Urban Outfitters and Banana Republic offering such services. Even Unibail-Rodamco-Westfield, the mall operator, has launched a streetwear rental store.
Rental has largely been a North American phenomenon, although European interest is growing as concern about climate change mounts. (UK lawmakers recently proposed a penny tax on new garments.) “It’s this increased concern around the negative environmental impact of the fashion industry that is fuelling interest in circular business models in the UK,” says Fernandes-Wong.
“We’re yet to truly see a fashion rental company make any impact on the clothing retail market in the UK the same way that Rent the Runway has done in America,” says Chana Baram, senior retail analyst at Mintel. “While fashion rentals are particularly well-suited to occasionwear… it is unclear if people will be happy to rent everyday items on a regular basis.”
Handbags available at Cocoon
UK rental startups like Hurr Collective, By Rotation and MyWardrobe HQ have emerged, but they focus on apparel and operate off a peer-to-peer model. Since users manage everything from storage to dry cleaning, companies avoid the cost of big warehouses and complicated logistics around shipping. Many of Hurr’s customers, for instance, physically meet in London to exchange items — although the platform also offers users postal and courier options. “Ultimately, each user can decide what’s most convenient for them with no geographical limitations,” says co-founder Victoria Prew.
By contrast, Cocoon currently only offers bags and receives its stock — a mixture of new season, pre-owned and vintage bags — from third-party suppliers or directly from brands. “We decided on a membership model because we know how unreliable customers can be. We own our product so can fully control the experience,” says Fernandes-Wong, adding that the business decided to focus on bags because they don’t have sizing or fit issues.
But even Rent The Runway had issues with reverse logistics. The company was temporarily forced to stop accepting new subscribers after issues integrating a new warehouse. Cocoon uses two courier services in London that provide next-day and same-day delivery; it also partners with the Restory on maintenance. “We’ve built our business with [returns] in mind… and it’s something we’re continually improving,” says Fernandes-Wong.
As the company expands, Fernandes-Wong hopes to change how consumers think about their wardrobes. “There are people who are [looking for a bag] for just one event, and maybe they will use us twice a year but not rent from us again — that’s not the customer I’m focused on,” she says. “The ultimate ambition for Cocoon is to be the largest way that women use handbags. It’s key that they feel ownership towards an item.”
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