Florentine Gillis – CIRCLE CLOSET

Florentine Gillis is the founder & CEO of CIRCLE CLOSET. CIRCLE CLOSET is a Dutch fashion rental community to rent and lend designer pieces on an occasional basis, for example when you have a wedding, event, or party. “In order to create a more sustainable life for myself, including my wardrobe, I realised I often wanted to wear something new and refreshing. After checking the limited options of rental platforms, I decided to create my own platform that could make the fashion industry more circular and sustainable. That is the origin of the CIRCLE CLOSET.” We spoke to Florentine about her motivation for making a change, the challenges when launching a new business, the role of sustainability in society, and (in)actions by well-known fashion brands.

Photo credits: Lidian van Megen

“Our goal is to expand to other parts of Europe in the future.”

PR & W.O.M. WORK WONDERS

“Renting clothes is generally not an impulsive purchase – quite the opposite actually – so building awareness of this possibility is very important. In our case, we see that PR works wonders,” says Florentine. “PR ensures that our name becomes lodged in consumers’ minds and makes them trust our brand just like journalists do. We also enjoy a lot of positive word-of-mouth referrals, because our products are selling themselves without any interference by us or a middle-man.” CIRCLE CLOSET provides the platform to bring together supply and demand, and Florentine further elaborates how word-of-mouth boosts their momentum: “Every Monday we see our website traffic going up. It is because, during weekends & events, people get in touch with someone who used CIRCLE CLOSET and in exchange recommends it. As a result, new people look us up on our website. We see that approximately 30% of our customers come in through their friends.”

“Through the means of PR, we are also able to share our story which is a key component when building a new brand.“

EARNING MONEY FROM LENDING AS A NUDGE TO BUY HIGH-QUALITY CLOTHES

Consumers will often buy a high-end piece of clothing for an event. Florentine shares that the most important driver for their customers to rent is to offset such purchases. But with CIRCLE CLOSET they can not only rent items for upcoming occasions, they can also lend the high-quality pieces sitting idle in their closet. All of a sudden they can make money with these items. Florentine explains how it was a deliberate choice to go for the high-end segment: “We consciously decided to make a platform for high-end clothing as lower-end brands would not make much of an impact on the lender. By earning decent money by lending clothes, we want consumers to invest in quality pieces instead of buying fast fashion. Investment pieces make you happy for a long time, and you can earn money with them.”

EVERY CHALLENGE CONTAINS THE SEEDS FOR OPPORTUNITY AND GROWTH

“At this moment [halfway through 2023], we apply a lean strategy to our marketplace and have tested our proposition on Shopify. We learned that we have traction and product-market fit there. We now focus on building a scalable product – our CTO and a remote development team are working hard on this professionalization. This is one of our challenges: Even though we keep 20% of every transaction, you need scale – big volume – to make a profit.”

Florentine states that the new format comes with other consumer-related challenges as well. Wardrobe sharing is a new concept for most customers, and these consumers consider many elements part of the exchange before making a purchase (in this case, the decision to rent an item of CIRCLE CLOSET). “For example, how much are they willing to pay for an item, and what happens when they damage/dirty the rented fashion piece? This tells us that we need to work hard on the trustworthiness of the concept and be very clear on how it works,” explains Florentine.

CLIMATE IS OUR FOCUS AND FUTURE

“Climate change is of great importance to us. Battling it is ingrained in our business model and therefore the choices we make. These are things we are still working on. For example, we are really focused on the reuse part of the circular model and are currently testing to provide reusable packaging to our lenders.” Another area where CIRCLE CLOSET is exploring possibilities for optimization is what happens when items wear out and are no longer suitable to lend. Currently, there is no structural solution in place for what happens next with these items. Florentine sees this as an opportunity for CIRCLE CLOSET to delve into textile recycling and to collaborate with mainstream brands, hoping to influence their production process. “Doing so, we help consumers become more circular and simultaneously create a more sustainable fashion industry”, she explains.

“We want our consumers to keep each of their own pieces of clothing in use for as long as possible because that means it is being used to its full potential.”

Also currently explored by Florentine and her team is stepping into the resale space, doing something similar to Vinted. However, with high-end clothing, there’s the chance of people buying it, wearing it once, and then returning it as if there was something wrong (size, style, fit, etc.). With this trick, consumers aim to get a full refund. “We think a try-before-you-buy mechanism can work well for CIRCLE CLOSET, where you rent an item to try it, and subsequently buy it for the remaining amount if you like it.”. Such a rent-and-buy option eliminates the workaround consumers attempt via returns.

CLOSE TIES WITH THE CIRCLE CLOSET COMMUNITY ARE KEY

Building a user-based community is of great importance for CIRCLE CLOSET. A community can improve customer loyalty and stimulate network effects. Additionally, it can safeguard you when competitors enter your market space via a lock-in effect. “We are working hard on our community, focusing on the themes of togetherness and sharing. We try to include our community in the development of our platform and solicit feedback from them by having weekly calls and letting lenders visit our office for a chat. We also organise community events to shift the interaction from purely business to a much more personal level and have some fun.”

This community can also help when expanding the business to include a men’s section, Florentine elaborates. At the time of writing [halfway through 2023], CIRCLE CLOSET is working on piloting a men’s clothing collection. The marketing strategy for this will revolve around women introducing the platform to their male acquaintances. The network effect of a strong community can be a great asset in this process.

CHANGING THE FASHION INDUSTRY BY CHANGING CONSUMERS

Although a pioneer in the fashion industry, Florentine is definitely not alone in her strive for a more sustainable world. “I am part of a circular business group with other small businesses such as Reflower and Tinylibrary, who started their business purely to do better for both the economy and our climate by trying to change the supply chain they are active in. And in terms of big names in the fashion industry, there are definitely brands that are doing their best to improve and be circular, such as Nudie Jeans. Consumers can purchase new- and second-hand jeans with the possibility to get them repaired for life.”

“Primark used to approve the item quality standard after six wears. This should simply be illegal. You’ve designed and produced a product to be discarded.”

Staying in the denim domain, Florentine elaborates on how Levi’s jeans in the 1950s were of much higher quality because they were designed to last as long as possible. “Nowadays, fabrics are so thin and of such low quality that they do not last long at all. So if you as a manufacturer start offering a repair-for-life service with your products, you will automatically push the whole supply chain to produce items that will last.”

This is where CIRCLE CLOSET can make a difference: “We see the same happening with our lenders. For an upcoming event, they would normally consider buying something at ZARA, but now they know that they could also buy a more expensive, high-quality item and see it as an investment. The item can be rented out and overpay back the investment. If we can grow this movement, consumer demand will turn to more high-quality clothing. We hope our support in this process ultimately influences manufacturers to produce clothing to last, instead of failing all too quickly.

PLENTY OF WORK TO DO

Despite fashion brands taking (first) steps towards sustainable production, there are still many manufacturers whose strategies Florentine finds questionable. She starts with H&M: “H&M has a rental concept, resale, and works with more durable/sustainable materials. Those are good initiatives that do a great job of stimulating positivity. But still, I can’t help but feel it is greenwashing because they continue to underpay their employees, and still apply a business model which is driven by overconsumption. However, H&M is still doing a pretty good job in comparison to ZARA, which does not have any statement on its CSR strategy whatsoever. Nevertheless, this does not refrain consumers from shopping at ZARA.”

Consumer behaviour underlines how difficult it can be to break habits, even among our youngest generation of shoppers. “One thing that especially confuses me is Gen-Z. A considerable part of this generation is demonstrating measures against climate change and striving for action, while others – or sometimes even the same individuals – continue to buy heaps of fast fashion, especially in shops such as Shein and Boohoo. This behaviour is driven by social media, clothing trends, and wanting to look good due to social pressure.”

“From a consumer perspective, a cultural change towards more sustainable production and consumption is key. Collectively, we’ve made a start. We at CIRCLE CLOSET work hard to accelerate this change.”