Time has been a confusing concept in 2020. In March, our worlds were upended by a brutal and unrelenting pandemic. Eight months later, March feels like yesterday and a decade ago.
As we enter another wave of COVID-19 outbreaks across the US, much of the workforce will continue or return to working from home. In our mostly digital workplaces, employees are navigating how to collaborate effectively to meet their teams’ objectives and get their jobs done—from home. This pandemic-era reality has shifted our purchasing behaviors, including when it comes to workplace attire.
Online pants purchases fell 13% across retailers as of May, for example. Meanwhile, sales of shirts and tops—all that’s visible on a Zoom call—have increased. Here are some other shifts and opportunities unfolding across the clothing startup ecosystem because of the COVID-19 pandemic:
Brands are expanding their offerings to include lounge- and leisurewear
Spending an extra 40+ hours at home each week has increased our collective interest in comfy threads, from pajamas sets and sweatpants to stylish leisurewear. Brands have taken note. For example, Boston-based Vetta launched its versatile collection of mix and match loungewear essentials in November 2020 and San Francisco late-stage VC startup Everlane recently dropped their line WFH-ready cotton joggers.
Other clothing startups offering new and/or expanded cozy apparel options include:
Knix
Founded in 2002, Knix is a late-stage VC company based in Toronto. Founder Joanna Griffiths and her team are building a size and age-inclusive intimates brand, offering wire-free bras and leakproof period underwear. During the pandemic, Knix released its Cozzzy Collection, which includes pajama sets, lounge separates, robes, scarves and more. Several pieces, including their ideal-for-chilling romper are created using modal fabric—a semi-synthetic fabric made from beech tree pulp.
Knix most recently raised $3 million in March 2020 in the form of convertible debt. Led by Acton Capital Partners, Alumni Ventures Group and SWAT Equity Partners also participated in the round.
TomboyX
TomboyX offers a collection of eco-friendly, ethically made bras, underwear and loungewear for all genders and all bodies. Founded in 2012, the Seattle-based brand released its onesie pajamas in September 2020, calling them “ridiculously soft and comfy.” With deep pockets (read: snack storage compartments) and a rainbow half-zip closure, the brand’s newest offering has relaxation written all over it.
Prior to being approved for a PPP loan in April 2020, TomboyX raised $18 million as part of their Series B funding round from The Craftory in May 2019.
Parachute
Headquartered in Culver City, California, Parachute Home is an early-stage VC company that was founded in 2013. Known for stylish home goods and bedding and bath essentials, the brand expanded its offerings amid the pandemic to include a line of luxe, 2020-appropriate cotton-waffle sweatsuits.
Parachute Home most recently raised $29.68 million in a deal led by H.I.G. Growth Partners as part of its Series C venture funding round in June 2018.
Online fashion resale platforms are experiencing record growth
In a fashion industry landscape that’s otherwise bleak, clothing resale platforms are a bright spot amid COVID-19, according to Fashion United. Coupled with a rising awareness for the human and environmental costs of fast fashion, consumers are increasingly receptive to second-hand garments. Startups in this space offer buyers and sellers an effective way to shop and sell—largely without leaving their homes. At the confluence of a unique and otherwise tragic set circumstances that came to fruition in 2020, these fashion startups are faring well:
Depop
London-based Depop is a late-stage VC company that was founded in 2011. The company operates a mobile marketplace that helps users discover and purchase second-hand fashion. The company’s mobile app helps people find unique and inspiring stylists, designers, shops, vintage sellers, as well as set up their own stores. Between April and June 2020, Depop saw a 163% YoY increase in new app signups, a 200% YoY increase in traffic from the US and a 300% YoY uptick in items sold.
Depop most recently raised $50.5 million through a combination of debt and Series C venture funding in September 2019. The deal was led by General Atlantic, and HV Capital, Balderton Capital and others also participated.
Vestiaire Collective
Vestiaire Collective is a late-stage VC startup headquartered in Paris. The company operates a global resale site where users can buy, sell and share designer fashion. From vintage and luxury clothing to accessories and footwear, Vestiaire Collective ensures the quality and authenticity of more than 25,000 new items submitted by its community of sellers each week. In May 2020, the volume of Vestiaire Collective’s orders were up 54% compared to the pre-pandemic February 2020 average.
Vestiaire Collective most recently raised $64.37 million through a combination of debt and equity in April 2020. The equity portion of the Series G round was provided by Bpifrance, Condé Nast and others.
thredUp
Based in Oakland, California, thredUp is a late-stage VC startup aiming to help solve the fashion waste crisis by extending the life of clothing. Founded in 2009, the company created a one-stop destination for thrift shoppers with 35,000 brands carried and 2.4 million items listed at any given time. Fashion United reports that thredUp saw a 30-40% increase in sales of leggings and blouses at the onset of the pandemic, while blazer and cocktail dresses dipped. Many first-time thredUP sellers are interested in decluttering their space during the pandemic. The company offers a Clean Out Kit that allows to make extra cash by filling and returning a bag filled with unwanted items from their closets.
Prior to filing to go public in October 2020, thredUp most recently raised $175 million of Series F venture funding in a deal led by Irving Investors and Park West Asset Management in August 2019.
Fashion subscription services struggle, refine their approach
The growth resale platforms is unique across fashion startups. Fashion subscription services, which can be pricier, haven’t weathered the shifting landscape as successfully. Declines in sales and membership renewal rates have significantly impacted this segment of the industry. Results have come in the form of scale-backs, hiring freezes and layoffs at companies like Le Tote and Gwynnie Bee. Here’s how several membership-based fashion startups are faring:
Rent the Runway
Known for offering its members red carpet-ready fashion, New York City-based startup Rent the Runway has experienced a pandemic-era dip in sales. The company is embracing WFH-ready and loungewear rentals during COVID-19, as well as promoting “the house dress” as their favorite pick of the moment. The company is reportedly overhauling its subscription plans—which run $89-$199 per month—and diving deeper into the business of selling secondhand as interest in renting has waned during the pandemic.
Most recently, Rent the Runway secured $100 million of late-stage venture funding through a combination of debt and equity in October 2020. SuRo Capital, Ares Management and T. Rowe Price were involved in the equity portion of the round.
Curateur
In October 2020, fashion designer, businesswoman and author Rachel Zoe announced the rebrand and relaunch of her subscription fashion service formerly called Box of Style. Earlier in 2020, Glossy reported that Box of Style’s subscriber growth had declined between 20-30% but that sales and subscriptions had rebounded as of May. Box of Style did find some success during the pandemic with its e-commerce marketplace, and that functionality—now called “The Shoppe”—features prominently in Curateur’s overhauled offerings.
By Rotation
London-based peer-to-peer clothing rental startup By Rotation launched shortly before the pandemic took hold in the UK. Since then, the company has enjoyed some early successes, especially given the difficult market conditions. As of July, By Rotation had garnered 20,000 users—up 60% since the UK’s initial lockdown began. The company focuses on helping users develop more sustainable fashion consumption habits by decreasing textile waste. Additionally, Business Insider reports, the app’s social features could be part of its draw—creating socially distant new friendships during these isolated times.
While there has been some movement in the race to develop a COVID-19 vaccine, it’s likely that many of us will continue to work from home into 2021. While fashion startups are pivoting to ensure we have a plethora of comfy clothing options, PitchBook is also expanding its offerings. Several of our recent new feature releases focus on helping teams work better together—regardless of the physical distance between colleagues. Workspaces, our newest feature, facilitates better organization across projects, communication across teams and gives direct access to our analysts’ insight. The good news is that there’s no dress code for streamlined digital collaboration.
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