Clothing rental as a business model: 6 Lessons from 10 years of Lena the Fashion Library

Business|Interview

Opening of Lena the Fashion Library in de Pijp in Amsterdam. Credits: Photo by Joan Victoria Foutty

Many clothing rental companies have come and gone in recent years, but Netherlands-based Lena the Fashion Library has remained steadfast. Co-founder Elisa Jansen admitted that it wasn't always easy, having only found the perfect pay-as-you-borrow business model after five years. “You have to be patient and really dare to test it if you are going to rent out clothes,” she said at the brand-new location in De Pijp in Amsterdam.

Lena the Fashion Library is special in many ways: not only because the company still exists, but also because it focuses on clothing for everyday wear rather than occasion wear. There are many lessons to be learned for entrepreneurs from its 10-year adventure in clothing rental. “We want renting clothes to become normal, and for that, the major brands and retailers also have to join in.” In the hope of bringing about this change, Jansen was happy to share her knowledge during an interview.

Lesson 1: Right payment model

“We were quite early with the concept of borrowing clothes, so it was pioneering, and still is,” said Jansen. The company started with a fixed monthly price subscription model. Each subscription came with a number of points (for example, 19.95 euros per month in exchange for 100 points). The customer could then have a maximum of 100 points worth of clothing at home each month. “We thought that [a subscription, ed.] would work well, and we’ll just give it a try.” That was the case at the beginning. Many subscribers signed up, but the first cancellations created the need for research. The biggest reason for cancellation was: ‘I think it’s such a great concept, but I just don’t have enough time to come by’.

For Lena the Fashion Library, this was the moment to also implement the concept online. “Then we set up a whole online system, but that turned out not to solve the problem. New people kept joining, but they were also leaving through the proverbial back door. As a result, we remained at too low a level all the time.” Jansen admitted that a lot has been tried and testing new models while you are already a running business is not always easy. “Customers come to exchange clothes about once a month, so you have to test for at least six months to know whether something works or not.” There have been flexible subscriptions, one time rentals, but based on feedback from the community, the pay-as-you-borrow model was eventually set up.

“With a monthly subscription, it felt like an obligation to borrow something, and then the feeling that people had with it just wasn’t right anymore. Borrowing clothes should feel like shopping, like an addition to your wardrobe where you can experiment with clothes.”

Each garment now has a daily price of a number of credits. One credit equals 25 cents. For example, a King Louie jumpsuit is six credits per day (1.50 euros). The minimum loan period is 14 days so that it remains profitable for Lena the Fashion Library. “On the other hand, we also do this so that people can get a taste of what it is like to borrow clothes for everyday use instead of just for special occasions.” There is a minimum loan period, but no maximum. “You can borrow it for as long as you want.” If the borrower is finished with the item, it can be returned or exchanged. “Sometimes you take six items with you, other times only one. You pay for what you use, and if you don’t borrow anything one time, then the payment stops immediately.” You are not tied to anything, which was the case with a monthly subscription. There is also flexibility within the 14-day minimum. “If you are finished with an item within 14 days, you can exchange it for something else. An exchange of clothes is free, so you don’t pay twice on an exchange day.”

Lesson 2: Importance of physical locations, make borrowing feel like shopping

Jansen emphasised the importance of physical presence. “We notice that the share of online borrowing is much smaller than what happens here in the shop.” Around 90 percent of all borrowing takes place at the physical locations in Amsterdam. “I do think it’s important that you are visible online and can show what items you have and what is available,” she admitted. “You notice that quite a few people place the loan order online and then still come here to try it on. They want to feel it and see it.”

“Online, expectation management surrounding the products is more difficult,” said Jansen. This concerns the sizing of an item and also the fabrics, but don’t forget the information that customers want about the borrowing process. “How do you exchange something online if something isn’t right, when does your loan start, what about shipping costs?” This explanation is easier to give at the physical location.

The fact that Lena the Fashion Library is currently only located in Amsterdam is a conscious choice. In the coming years, there should be a location in every district of Amsterdam. “This is all about making borrowing easy and accessible for people.” At the moment, it is possible to borrow an item at the location in De Jordaan and return it in De Pijp. “If you use Lena as part of your wardrobe, then it’s just very convenient if you live nearby.” The more physical points, the more accessible it becomes.

Once the network in Amsterdam is in place, there is also a desire for clothing libraries in other parts of the Netherlands. “We get a lot of requests.”

Lesson 3: Desirable assortment

Lena the Fashion Library once started with mainly vintage, but now 90 percent of the range is new and only a small part is vintage. “By buying new items, you can offer a size series of an item. We notice that this attracts a much broader target group.”

That range must be ‘desirable’ so that it is actually borrowed, but the company does not consciously take trends into account. However, it does work with brands that have embarked on the road to sustainability. Although Lena strives for the most sustainable range possible, the company has also learned that if something is produced sustainably, it unfortunately does not always mean that the quality is very high. “Quality is the most important thing for us. The quality ensures that an item can be borrowed often.”

It is almost unheard of for a garment to be included in the collection but not borrowed. “I think that has to do with borrowing. It’s a different mindset. You can try anything you wouldn’t normally buy. If it’s not for you, you bring it back, otherwise it surprises you.”

An item is in Lena’s collection for a minimum of three years. “We buy new collections, but much less than a normal shop. The new items are combined with the old collections again.” An item stays with Lena until it is ‘finished’. When asked, Jansen clarified that ‘finished’ for them means that an item simply looks too worn. If an item is damaged during a loan period, Lena first tries to upcycle it. “For example, if there is a stain on the sleeve, we first try to make an item sleeveless.”

The fact that Lena buys less than a regular shop also means that purchasing and working with brands is a bit more difficult. “You are combining a linear and circular system with each other. The purchase price is based on a fairly quick sale. Our income is spread out over a very long term.” In the early years, it was therefore not possible to purchase all the collections that the company had its eye on. “Fortunately, we can do that now, but it took a long time before you had that purchasing power.” Jansen said that some brands offer lower minimum order quantities or longer payment terms, but these are mainly smaller, more sustainable brands.

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Lena the fashion library. Credits: Joan Victoria Foutty

Lesson 4: Don’t underestimate love for fashion

Anyone who thinks of borrowing clothes may immediately think of the target group of conscious consumers. There is no denying that this group comes to borrow clothes, but Jansen has noticed in recent years that another group is also discovering it. “For many people, the main reason for borrowing is still sustainability, but there is also a shift there. For a large group, sustainability is number one and fashion is number two. Now there is a group joining where fashion is number one and sustainability is number two. They like that they are doing something good for the planet, but actually they are mainly very happy with all the different items they can wear.”

That interest in fashion, creativity and experimenting with clothes should therefore not be lost sight of. “That interest in fashion must be there. If someone does it mainly or only because of sustainability, then you often have people who buy less and buy one pair of trousers every three years. They don’t have much to do with exchanging items.” What Jansen describes is also exactly one of the outcomes of a study by Thomas More from Amsterdam’s University of Applied Sciences. This showed that clothing renters experience more variety in their wardrobe and that they can try new styles in this way.

“The loan system makes fashion light and accessible again. Quite a few people who come to us are already very conscious buyers and then it can sometimes become a bit heavy. Because if you buy something, how often do you wear it? While here it’s just: ‘Oh, I’ll take it with me and if not, I’ll just bring it back’. The piece of creativity and experimentation is retained.”

Lesson 5: Cleaning

When purchasing the range, it is taken into account that the items are washable. “That is also a big difference with other clothing rental competitors who have items for special occasions. These items are often tied to dry cleaning. They are difficult items, which immediately increases the costs.”

Lena therefore shares the responsibility for cleaning with the borrowers. Each garment has its own washing instructions from Lena. “The simple items can be washed at home by the customer at, for example, 30 degrees or a wool wash programme and returned. More difficult items have ‘cleaning by Lena’ on the label and we wash them ourselves.” If a customer is unable to do a wash, they can buy a wash at Lena for the item. This has a price tag of 2.50 euros.

Lesson 6: Think long term

“Clothing rental is not only good for the planet, it is also commercially interesting. You just have to be able to think long term. That turns out to be difficult for many companies. Because if you first lend something out very often and then sell it at a lower price, then that sum is of course higher than one quick sale. You just have to set aside two or three years for it.” She admitted that this may not be an easy change for traditional companies that are geared towards sales. “I always try to convey that urgency, because it just has to be different.”

Quickly trying out clothing rental within your company is also not an option. “You really have to try it for a year or two if you want to say something about such a test. People have to be able to get used to new things. You have to plant quite a few seeds if someone wants to try something once, because often people have read about us in the newspaper and then a friend has also borrowed something and then, with a special occasion, they start thinking about borrowing clothes themselves. But that can sometimes take years. If you have grown up only buying clothes, then you need time.”

The entrepreneur indicated that large companies can make a huge impact if they start renting out clothes. “Renting clothes should become normal. I really dream of a high street where at least a lot of shops lend out part of the collection. Then people have the choice of whether they want to buy or borrow something.”

To normalise clothing rental, Jansen would also like to see the government support these types of business models. “Maybe with different tax rates. The rules are now made for a linear model.” In addition, there are also many subsidies and schemes that focus on recycling raw materials. “While those are still new products that are being made.” However, the circular system is more than just recycling, but also extending the life of a product, which can be done through lending, among other things.

This article was translated to English using an AI tool.

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