The recent awards season has seen a new dress-code emerging on the red carpet - wearing clothing either rented or previously worn, in an aim to project a message of sustainability. This reflects trends in the wider fashion world, where sustainability models like rental and resale are emerging fast as brands and consumers look to minimise their impact.

The fashion footprint

The statistics speak for themselves in terms of the fashion industry's impact on global pollution. A UK parliamentary committee report pointed to the vast amounts of CO2, water consumption and microplastics for which the industry is responsible. A well-cited contributing factor is the inventory challenge as consumers and brands alike have their own pile-up of unworn clothing. More conscious consumers are starting to expect change from brands and there has been a rise in consumers turning to the rental and resale markets for a greener fashion fix.

The "second-hand" shopper

A number of new disrupters have entered the resale market in the UK such as the social shopping app, Depop, which has blended the social aspects of Instagram with the buy-and-sell format of eBay and is reported to have over 15 million users in 147 countries. Several traditional luxury brands are now also positioning themselves in the resale market. Ralph Lauren has launched “Re/Sourced”, a collection of vintage products sourced by the sellers on Depop and Selfridges recently opened its first permanent space at its London flagship store dedicated to second-hand clothing. The second-hand luxury shopping market is predicted to grow 12% year on year, compared with 3% growth for the luxury market overall (Source: Bloomberg).

The "rental" shopper

Rental shopping is also on the rise. Already the norm in the US with websites like Shop the Runway, clothing rental brands are gaining popularity in the UK. Hurr Collective is the UK's first peer-to-peer clothing rental service which allows lenders to make money from their under-utilised wardrobes and renters to access designer pieces for around 20 per cent of their original retail price as well as cycle couriers (for London-based renters) and a partnered eco-friendly dry-cleaners to make the process even more consumer friendly.

The legal challenge

Under the Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013 quoted companies are required to provide information on the impact of the company's business on the environment within their strategic reports. However, the Environmental Audit Committee, a government select committee dedicated to examining how government policies and programmes affect both the environment and sustainable development, has called for the UK government to “end the era of throwaway fashion” and step up its support of the industry in its efforts to become more sustainable. Whether or not the government will bring in more mandatory requirements is yet to be seen (and in an upcoming blog we look at the challenge posed by defining what "sustainability" means in the industry).

As well as commercial and environmental opportunities for brands positioning themselves in the rental/resale space, we anticipate that there will be some legal challenges arising from a drive towards sustainability such as:

  • Sourcing and supply chain considerations; "pre-loved" items will likely be harder to trace for the purposes of compliance, workforce ethics, labelling and product recall;

  • "Traditional" brands, entering the new rental/resale markets will likely require new contracting frameworks, potentially different tax or accounting treatment for new sales processes or garments – particularly if the underlying owner of the garment takes a commission;

  • Devising policies and procedures for new customer journeys which are developed, such as returns policies for "pre-loved" clothing which may already have some wear and tear; and

  • Ensuring any claims that are made in relation to sustainability are credible and can be substantiated to avoid scrutiny from the ASA which has already levied fines against some major brands (in an upcoming blog we look at the issue of "greenwashing").