One of the most difficult industries to operate in is the fashion industry.
Fashion is an increasingly competitive game. Trends shift like the tide and, thanks largely to social media, often happen in rapid succession of each other.
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It’s no longer the case where we associate certain decades with fashion trends.
The 1990s, for example, were identified with oversized blazers and slip dresses. The 2000s saw trucker hats and low-rise jeans.
Nowadays, though, fashion comes and goes much faster. We associate years — or even sometimes seasons — with trends.
Fall 2024, for example, was the season for suede, lots of earthy brown tones, and shoulder bags.
And businesses, it can be even harder to keep up.
Fashion companies must anticipate trends and place orders for inventory far ahead of time. And once a trend is gone, it can be incredibly difficult to offload overstock.
CaaStle’s struggles are catching up with it.
Image source: Getty Images
The fashion industry is uniquely challenging
Getting operational is hard to do in the fashion industry.
Unlike consumer staples retailers, which often fill a need, fashion is far more niche and personal; buying trendy new clothes is often thought of as a luxury. This means fashion companies must work harder convince potential customers that it is worth putting money into.
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Which is why some fashion rental companies have seen success. Rather than spending untold resources on the design and creative process, these companies instead opt to source inventory from already-popular brands and rent out clothing and accessories to an already interested customer base.
Rent the Runway, which rents out high-fashion labels to customers who may not otherwise be able to or want to pay thousands of dollars for a luxe item, is one such example.
Fashion rental company meets trouble
But getting into the fashion rental game isn’t always easy.
That’s what CaaStle is learning the hard way.
CaaStle, which loosely stands for Clothing as a Service, was founded by Princeton grad Christine Hunsicker in 2011. The company aims to give women access to an infinite closet by renting out clothes from places like Macy’s and Express.
But in March 2025, Hunsicker abruptly resigned.
“We have learned that Christine provided certain investors with misstated financial statements and falsified audit opinions, as well as capitalization information that understated the number of company shares outstanding,” a board finding wrote to its investors.
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In 14 years, CaaStle (which was originally called Gwynnie Bee) had raised $520.9 million and saw losses of $510.5 million.
“The company is facing a severe and immediate liquidity problem. In addition, law enforcement authorities are investigating. We are fully cooperating with their investigations and are committed to maintaining the highest standards of integrity and accountability,” the board wrote at the time.
Now, however, the company has just received a $2.75 million bridge loan — but it’s hardly out of the woods.
CaaStle is reportedly planning to file for Chapter 11 bankruptcy as its troubles are too hard to overcome.
“All loan proceeds will be used to fund CaaStle’s critical operations and expenses related to considering strategic transactions and planning for a Chapter 11 process,” the board said of the loan.
At the end of March, Axios reported that all of CaaStle’s employees were furloughed for at least two weeks.
