Rental has inched its way into the fashion industry slowly but surely, and in recent years has seen significant growth in demand as consumers lean towards more sustainable alternatives to shopping.
Founded in May 2018, Hirestreet was one of the first rental platforms in the UK, launched by Newcastle Upon Tyne’s Isabella West. The idea sprouted from personal savings and flourished in her parent’s basement, from which the now nationally-renowned company was formed.
Since then, the 26-year-old Oxford economics grad has assembled the beginnings of a rental empire. In 2021 alone, West has introduced major brands to Hirestreet, most recently Marks and Spencer, taken part in COP26’s New York Times hub and launched Zoa, a white-label tech company.
Catching West for a quick chat, FashionUnited spoke to the budding female entrepreneur about who Hirestreet is, her experience in the industry and what we can expect from the booming rental market.
How was your experience setting up a business in Newcastle?
We always knew we were going to be an online concept. I think I was always quite lucky to have been in Newcastle and there are many reasons for that. One, that I didn’t know at the time, is that the developer market is amazing, which helped as we transitioned into a tech company.
There is also the community, in Newcastle, everyone is so supportive. Everyone knows everyone, so I really benefitted from that in the early days. Especially for the launch, where the first orders I would see were from friends of friends or people from my old school. It was almost like people wanted to champion someone from the local area. It has obviously gone beyond that now, but I think it really helped to give me a boost in the beginning. I think if I started in London, I would have felt lonelier, a bit more disconnected.
Where did the idea for Hirestreet come from?
Ultimately, we wanted to provide a sustainable and affordable alternative to fast fashion. Four years ago, when I was thinking about launching a business, I read about the rise of rental in the US and Australia. What I noticed in those markets was that you tended to see more rental at a more premium level. I started doing market research in the UK and in the UK we just love fast fashion. I wanted to reduce the waste that was associated with fast fashion, and find out whether it was possible and sustainable to build a business based around rental that was at a more accessible point.
Our average rental price is deliberately 30 pounds because that is what our customers told us was the price a dress on Asos would need to be for them to wear it once. We wanted people to have a substitution for that kind of behaviour. I think way too often, sustainable businesses are too expensive for consumers and they can actually put people off. I really just wanted to solve that problem, offering a mass-market solution that is more comparable to fast fashion price points.
Did you face any challenges when setting up this rental business model?
There was a lot of learning, of course, because we launched at a time when there was only one rental business in operation and they were more focused on celebrity and occasionwear. We were very new to the market and our proposition was very different. There was a lot of learning in terms of what stock would work, what brands people wanted, what items were durable, the size profiles - there were so many things you had to test in the beginning.
If you look at the market now, rental businesses popping up can look at Hirestreet and see how we have shaped the business. There is a bit more of a blueprint if you enter the market now, and when we entered there was nothing at our price point in the world even.
What are the environmental benefits of rental in the industry?
The key thing about rental is that it extends the lifetime of an item. If we take the standard polyester dress like the one someone would buy for a Christmas party, for example, it typically releases an average of 24 kilograms of carbon into the atmosphere during the retail lifecycle. Now, 90 percent of that actually happens during the manufacturing process, not in its daily use. When people are buying that to only wear it once, you end up with all that emission that is getting wasted, when, in fact, what rental does is give several people the opportunity to wear one garment. It splits the production-produced carbon over every person that is wearing the dress and reduces the carbon footprint associated with that item.
It is about how many times someone is going to wear an item, and that is why we don’t go in saying rent everything that you are going to wear. There is a certain use case for rental, whether that be occasionwear or skiwear: anything from when you stand in a store and you’re not convinced you would wear something over and over again.
What is the most important category for Hirestreet?
Weddings are the biggest conversion factor. Many people start renting for the first time because of weddings. It is our most visited category. We update our categories depending on the time of year. We have to be on the pulse with what people are doing and where they are going, then we curate categories to rent within that.
Who is the Hirestreet customer?
We generally see more dominance from London and Manchester, because of the population of people. Our key customer is typically a 28-year-old working female, with a lot of events, often at the start of the wedding season. She wants to be conscious of her consumption, but also have a salary that can equally support her living expenses. Ultimately, she is trying to be financially sustainable and environmentally conscientious.
When we ask our customers what they would have done if they didn’t hire from us, they say they would have panic bought from Zara - it is that kind of person that is our core market. We need to intercept them at the point before they decide to buy an outfit for an occasion.
Do customers really intend to prioritise the sustainable part of the business then?
To be honest, if you look at any kind of customer survey, the main driver for customer behaviour is almost always price. Price and sustainability are an important mix and that is something we deliver on that no one else does. The key driver is the price factor, and sustainability is something they are looking for, so it is an added conversion benefit.
Do you think it is then the brands’ responsibility to educate their customers on their environmental impact?
100 percent it is. There is so much that can be done on the education side and there has definitely been a shift post-covid. Since summer, our consumer research saw more and more people say they were feeling guilty for purchasing or that renting made them feel better. We are seeing an attitude shift from customers, but at the same time, there is still so much to do on an educational level.
When we launched our partnership with Marks and Spencer, what was interesting was the number of people that had never heard of rental before. It is an industry that is nearly five years old in the UK and it has grown dramatically, but if you compare it to the size of retail there is so far to go. With the Marks and Spencer release, we were reaching a part of the population that had never thought about rental before.
The partnership with Marks and Spencer is quite a big achievement.
Absolutely. They are the second biggest retailer in the UK and their move into rental will have certainly signalled others to look at the market seriously.
How do you select the brands you work with?
So we work on both Hirestreet, our own B2C platform, and Zoa, our tech platform that helps brands power their own rental service. We have a lot of people coming to us with an interest in rental and in the initial meeting we ask them what their goals are; whether it be looking into how desirable their clothing is for the market or testing the profitability of renting their returns.
Sometimes they just want to dip their toes in to get some early access and understand how their items perform. A Hirestreet proposition works best here. But if they are, let’s say, a business that has already decided that rental is going to work for them, we present the Zoa technology and we figure out how we can support them from there. We always have different ways we can work with you.
Many brands already want to know about rental and how it can fit into their future, so we sit down and figure out what is best for them: either Hirestreet, their own white-label service we can provide or a tech only solution, which is what a lot of start-ups are doing.
So is this the reason you launched the tech platform Zoa?
Yes. We used to have a relationship where we only worked with brands to list their stock on Hirestreet, but there became a tipping point during the pandemic where brands started asking us, theoretically, what if they wanted to do this with their own brand. We realised this is the way the market is going. Like the second-hand market, they would feel it out through third-party platforms then take it in house and do it themselves.
We decided to get ahead of the market, so we were, effectively, the first in the UK to launch a white-label rental proposition.
Do you have any further plans of expansion for both of your fast-growing companies?
Absolutely, I can’t say too much but we do have a good pipeline of brands that are going to be onboarding with us soon, doing their own white-label rental early in 2022. I think this year will be the tipping point for the UK rental market, and we will see a big wave of brands launching their own rental service. For us, that is our current focus.
You recently took part in COP26. How was that experience?
It was amazing! It was a definite wow-factor moment and I was so proud of the team for everything they did up to the launch. We spend so long thinking about the impact fashion has and we preach this message day in and day out. It was a really nice way to bring it all together. Sometimes it can feel like an uphill battle and you are the sole voice, then you go to COP and everyone is there to champion the same message. It becomes strangely reassuring.
Finally, what has it been like to be a young female entrepreneur in the industry?
When I worked in the industry as a consultant, the favourite statistic of the business I worked at was that they hired more people that had left Eton than there were females in the company. It was so male-dominated. When I started my own business, I would say being a female entrepreneur is really celebrated. It’s sad that it’s so rare, but I think it is important that I love what I am doing even more.
Something I really value is that so many of my close friends have started a business since I launched Hirestreet, and I would hope that some of the confidence to take that leap has been driven by the fact they saw me do it and they knew they could too.
There are still challenges, of course. For example, in fundraising, you can see in the numbers how much female-led start-ups raise in A rounds. I was also asked to find a male co-founder at one point. There are still areas that are sadly behind, but I think it’s changing because people want it to change. There are just some who find it difficult to celebrate a female entrepreneur running a multi-million-pound business. It is just something that we need to prove and change the more of us that do it.