When husband and wife Chris Halim and Raena Lim saw a way to solve sustainability problems in the fashion industry, they wanted to do it in style.
And the duo behind the Style Theory clothing rental app certainly doesn’t do things by halves.
“We invested about $ 40,000,” the couple, who quit their jobs to take over their start-up full-time, told CNBC Make It.
“To be honest, we don’t know whether we’re stupid or brave.”
Find the right fit
Lim and Halim are the co-founders of Style Theory, a Singaporean fashion rental platform that allows subscribers to borrow unlimited items for a flat monthly fee.
The start-up, supported by SoftBank, now has more than 200,000 registered users in Singapore and Indonesia and has an inventory of 50,000 items of clothing and more than 2,000 bags.
But when former Goldman Sachs banker Lim and his advisor husband Halim came up with the idea for the company in 2016, it came in response to a very common puzzle – nothing to wear.
Raena Lim and Chris Halim, the couple behind the Singaporean clothing rental platform Style Theory.
Style theory
“The ‘aha’ moment came when Chris actually questioned me and said, ‘Why do you have so many clothes and always complain that you have nothing to wear?'” Recalls Chief Operations Officer Lim.
“For someone with a financial background and using logic and math, it suddenly felt like wow. This really is a very illogical answer that I have to create,” she said.
Style it out
After spending her early career working for a nonprofit in Kenya, Lim was eager to start a project that would enable her to do good. And as the environmental damage caused by fast fashion became increasingly evident, the opportunity was clear.
Textile production is one of the largest polluters in the world, causing global emissions of 1.2 billion tons of carbon dioxide each year – more than all international flights and shipping combined.
We started with a waiting list so that we had enough clothes and enough capacity.
Chris Halim |
Co-Founder and CEO, Style Theory
This inefficiency has spawned a multitude of new apparel rental platforms that seek to satisfy conscious consumers with a guilt-free alternative to fast fashion.
The circular fashion industry was developed by US platform Rent The Runway in 2009 and has flourished over the past decade, inspiring other brands such as My Wardrobe HQ in the UK and GlamCorner in Australia. However, Southeast Asia’s logistical challenges made it a difficult market to crack. This prompted the new founders Lim and Halim to pursue a test-first strategy.
“We started with a waiting list first so that we had enough clothes and enough capacity for the customers,” said CEO Halim. “When the customers come in, we’re either right or wrong and then we keep iterating from there.”
Adopt a data-driven approach
The couple’s data-driven approach led them to switch from owning entire inventory to a consignment model in 2019.
Under the new structure, Style Theory holds inventory on behalf of designers and individuals and pays them every time an item is rented. The company then takes a cut in the $ 95 unlimited monthly subscription fee for administration, courier delivery, and cleaning of goods.
Style Theory fashion rental platform maintains inventory on behalf of designers and individuals and pays them every time an item is rented.
CNBC
That stance, in turn, has attracted investors including SoftBank, Alpha JWC Ventures, and Indonesian real estate company Paradise Group, who have invested around $ 30 million in the company.
“The problem they solve is definitely for the users, and in this case a lot of female users. But that also offers solutions (for) the vendors or designers to be able to reach this target market more directly, ”Jefrey Joe, Managing Partner at Alpha JWC Ventures, told CNBC Make It.
A fashionable industry
The financing signals willingness to invest in the young but growing sector.
The online apparel rental industry was valued at $ 1.2 billion worldwide in 2019. By 2027, that number is expected to more than double to $ 2.8 billion.
This circular fashion market is big enough to create at least one unicorn from Southeast Asia.
Jeffrey Joe
managing partner, Alpha JWC Ventures
Much of this growth could be led by the Asia-Pacific region, where the relatively young apparel rental market is ripe for disruptive players like Style Theory. According to market research firm Research Nester, the region is expected to account for almost a quarter (22.14%) of the total market within six years.
“The market size of this segment is still tiny … (but) we also see huge potential,” said Joe. “This circular fashion market is big enough to create at least one unicorn out of Southeast Asia,” he said, referring to startups valued at $ 1 billion.
Participate in the pandemic
The duo would like to seize this opportunity by tailoring their offerings to the specific needs of consumers in Asia. This includes curating clothing that suits local cultures and climates, as well as offering pick-up services and personal styling in pop-up stores.
However, the outlook for the fashion industry is not without its problems. The 2020 pandemic outbreak dealt a blow to retailers, reduced profits and closed stores. As social engagements were canceled and hygiene was a priority, the clothes rental business was hit hard.
Style Theory launched its resale business in 2020 in response to changing consumer habits amid the pandemic.
Style theory
“The pandemic is probably the toughest time for us as a company,” said Halim, whose business has only recovered 75% of pre-pandemic users.
“But it also brought a lot of possibilities. The most exciting thing for us was actually reselling fashion, ”he continued, citing a service that allows users to buy and sell used items. “(We) officially launched the platform last year and grew that business tenfold in about 12 months.”
A timeless collection
Still, the founders are certain that renting a fashion is not a fad.
They say Style Theory has enabled more than 2.3 million rentals in five years and saved more than 600,000 popular designer items from being dumped prematurely in landfills.
Basically, business is a baby to us.
Chris Halim |
Co-Founder and CEO, Style Theory
Now they plan to enter new markets and consumer segments to add men’s and children’s clothing lines and expand into Hong Kong later this year.
But despite the challenges, the couple say they have found a good addition to their fashion outfit.
“Basically, the business is a baby to us,” said Halim. “The full trust, the 100% orientation, is really very helpful and super important when you make important decisions together.”
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