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EXCLUSIVE: Brendan Hoffman Forms P180 Firm With CaaStle’s Christine Hunsicker; Invests in Elyse Walker

P180’s mission is to invest in companies that can utilize CaaStle’s business-to-business rental technology.

EXCLUSIVE: Brendan Hoffman Forms P180 Firm With CaaStle’s Christine Hunsicker; Invests in Elyse Walker

The Elyse Walker online rental site.

Brendan Hoffman is back on the industry scene.

He’s formed a company with an innovative business model called P180, in partnership with CaaStle founder and chief executive officer Christine Hunsicker.

P180 will invest in or acquire brands and retailers that stand to benefit from CaaStle’s business-to-business rental technology, and provide the kind of data and analytics that help companies buy and price merchandise better, and sell more goods at full price.

The partners also said P180 will help retailers and brands build margins by enabling them to rent fashion to customers, instead of resorting to deep discounting or unloading goods to jobbers at lower margins. Fashion that lingers on the selling floor without getting sold often could be viable as a rental, they said, particularly edgier or louder styles shoppers would wear for an occasion or two, but wouldn’t want to own.

“Based on the direction the industry is going, most retailers and brands need this sort of shake-up,” said Hoffman, the former CEO of Wolverine Worldwide, Vince, Lord & Taylor and neimanmarcus.com, now cofounder and CEO of P180. “They should be taking advantage of our monetization technology, to really enhance full-price selling and clear non-full price, supported by rental.”

“P180 is a financing and operating company,” Hunsicker, cofounder and chair of P180, told WWD. “We will be deploying some capital into very strong brands and retailers that need a little bit of cash, and also operating a large portion of their digital businesses….We’ve raised some capital. Our first investment is Elyse Walker.”

The partners declined to specify the size of the investment in Elyse Walker, the designer retailer operating six Elyse Walker designer stores and two Towne specialty stores, which also carry designer labels though with an assortment skewing more casual.

At Elyse Walker, Hoffman will be focused on building up the e-commerce arm, which is just two-and-a-half years old, and with room for growth. “We see Elyse as our proof of concept,” for P180, Hoffman said.

Elyse Walker, with the help of P180, has launched a rental business. Only some of the 200-plus brands sold at Elyse Walker will be available for renting. Among the brands sold, TWP, Partow, Rosetta Getty, LaPointe, Awake Mode, Nanushka and Câllas Milano.

Asked about additional investments, Hunsicker replied, “We’re in the late-stage process with a few very well-known brands.” She said P180 would disclose another investment in about four to six weeks.

CaaStle operates two warehouses in the U.S. and one in the U.K., enabling retailers and brands to run rental businesses. It provides data, analytics, all the logistics including shipping, cleaning and inspecting items, and restocking. Hoffman and Hunsicker met when Hoffman was running Vince and launched the contemporary brand’s rental service utilizing CaaStle.

“By providing the required information, we are really trying to unlock full-price selling,” Hoffman said. “But rental is the new channel we have added to be a better source of monetizing the non-full-price merchandise.

“The orthodox path is leaving our industry in tatters. A path that’s fundamentally different is needed.”

The executives said they won’t seek to fully take over a business P180 invests in. Rather, the strategy is to bolster monobrands or specialty retailers with some cash, and help run their e-commerce and rental operations.

By partnering with P180, Elyse Walker will integrate CaaStle technology connecting rental to e-commerce and transform how markdowns and “end-of-life” product profitability is managed.

“One of the hardest parts of retail is managing inventory,” Walker told WWD. “There is a vicious cycle of buying and marking down,” and typically a shelf-life designers impose on their product that Walker could extend. “Imagine a world where your product can last longer than the shelf life sometimes put in by designers. It could technically change our buying habits. We could be a little more adventurous. We could take risks and invest in more categories.”

Working with P180, Walker said, opens up her retail business to “a completely new demographic, where they can borrow (rent) from us and hopefully later decide to buy.

“We (recently) launched elysewalker.com. We have a lot of room for growth and do need support. We are not techies. We are all about people and product.”

Getting an infusion of capital from P180 suggests some challenges at Elyse Walker. She characterized business as “hard but solid,” with one or two stores falling flat or behind, while the two Manhattan stores, in TriBeCa and on Madison Avenue on the Upper East Side, are doing “really well.”

She is expecting growth online and with brick-and-mortar, though she doesn’t envision Elyse Walker operating more than a dozen locations.

Towne, on the other hand, “has greater potential” for growth, operating with faster turns. “Towne could easily be in East Hampton, Southampton, on Greenwich Avenue or in the suburbs of Chicago, and it’s not yet online.”

“P180 represents the culmination of our shared commitment to driving positive change in the retail industry,” Hoffman said in a prepared statement. “By combining traditional methods of building brand relationships, merchandising and curation with CaaStle’s technology and methodology around onetime rental and subscription rental, we can fundamentally change the profitability profile of retailers by monetizing the underperforming inventory that otherwise would be sold at a loss.”

EXCLUSIVE: Brendan Hoffman Forms P180 Firm With CaaStle’s Christine Hunsicker; Invests in Elyse Walker

Brendan Hoffman

“For over a decade, CaaStle has been at the forefront of apparel monetization technology. Our mission from Day One has been around yield optimization and maximizing the return of each inventory unit,” added Hunsicker in a statement. “Brands in P180’s portfolio will utilize CaaStle’s algorithms as well as borrow (single rentals) and subscription rental technologies as an alternative to deep markdowns and brand-diminishing liquidation sales and marketing. We are thrilled to partner with Elyse Walker to enhance their consumer’s digital experience.”  

The P in P180, stands for ‘project,’ explained Hoffman, and the 180 is a reference to “turning retail on its head,” or doing a 180.

EXCLUSIVE: Brendan Hoffman Forms P180 Firm With CaaStle’s Christine Hunsicker; Invests in Elyse Walker

Christine Hunsicker

 

EXCLUSIVE: Brendan Hoffman Forms P180 Firm With CaaStle’s Christine Hunsicker; Invests in Elyse Walker

Elyse Walker