Coucou, a seemingly successful rental shop for event outfits in Brussels, filed for bankruptcy in May 2024. In its closure announcement, the owners alluded to financial difficulties. Our Textiles Lead, Lucie Long, recently met with Isabelle d’Otreppe, one of Coucou’s two ex-owners, to understand their journey, challenges, and insights for future clothing rental and wider circular endeavours.
The journey
Marie Berlier and Donatienne Gerard established Coucou in Marie’s basement in 2015. Friends initially loaned them smarter outfits, which the pair cleaned, stored, and rented out. In exchange, friends received 30% of the revenue from their outfits. The business gathered momentum. In 2017, it attracted a second owner, Isabelle d’Otreppe. In 2018, with a grant of 80,000 euros from Bruxelles Environnement (the city’s environment agency), Coucou relocated to a high-street shop in an affluent part of town, hired staff, and invested in its own outfits.
Coucou was born of the desire to reduce textile waste by giving consumers the option to rent outfits, rather than buying and discarding them after a handful of uses. From an environmental perspective, Coucou was a success. Between 70-80% of their rental stock was bought second hand. Going by the number of annual rentals (from 1,500 items), they prevented the purchase of up to 9,000 outfits per year. Their vision of sustainable fashion gained popularity: revenues doubled each year between 2017 and 2020.
From 2020, however, Coucou faced an uninterrupted stream of challenges, and the business never attained profitability, even though Marie and Isabelle withheld their salaries several times and raised €270,000 in 2021. In 2024, depleted, they filed for bankruptcy.
Running a rental business model
Isabelle suggested that rental businesses yield far lower profit margins than their standard ‘sell’ counterparts. This is due to their higher costs and the lower prices they can charge per transaction.
Unlike linear retail shops, which typically produce their own items at lower cost, Coucou had to purchase each outfit at significant upfront cost. They minimised costs by buying most clothes second hand, but sourcing decent stock takes more staff time, which pushes costs up.
Running a clothing rental business requires more processes than a simple ‘sell’ business (Figure 1).
Customers also expect premium – and therefore costly – service, because they rent outfits for special occasions. Yet, the price per transaction must remain low enough to justify renting rather than buying.
So, profit relies on volume: renting out items numerous times to recoup costs. However, Coucou found it difficult to maintain clothes at a rentable standard. Outfits came back stained, did not survive their first cleaning, or – like a luxury Yves Saint Laurent dress, painfully lost at the airport on its first rental – did not return at all. They put much effort and creativity into prolonging clothes’ rental life – for instance, shortening sleeves where stains had appeared and buying more durable stock. Nonetheless, Coucou only averaged 11 uses per item (though the most successful reached 80 rentals).
Global events and local challenges
Shortly after moving to their first high-street shop, major global events hit the business in quick succession. Covid 19 prevented walk-ins and cancelled events demanding outfits. Next, the energy crisis increased Coucou’s overheads and prices, while diminishing consumers’ spending budget.
Coucou needed two to four full-time employees, in addition to Marie and Isabelle. As a small business in Belgium, they paid high employment taxes on top of salaries.
The final blow came in 2024. Coucou relocated to a new shop, where the cost of works exceeded their planned budget by four times.
Insights and conclusion
Uncontrollable world events aside, some of Coucou’s challenges are likely common to all clothes rental companies – and these must be tackled to give the textiles industry a real chance at circularity. Below are some insights, drawn from Coucou’s experience, on potential ways forward that may also be applicable to resale, repair, and other similar business models.
First, high-end clothing is not necessarily durable; due to their design or materials, items can be fragile or difficult to clean. Style can hinder durability if items do not fit well or are too original to be rented. While Coucou learned to avoid less durable outfits, invested in professional cleaning equipment, and used repair services, they still only averaged 11 uses per item. Durability is widely agreed as desirable, but usually in the context of extending the lifetime of products owned by individuals. Coucou’s experience suggests that durability should extend to the use of clothing by multiple individuals and make higher-end items easier to wash, repair, and alter.
Second, innovative, longer-term types of financial support should be explored to help rental companies. For example, Isabelle suggested that reducing the current 21% VAT rate to 6% could have made Coucou profitable (repair services already pay 6% VAT in Brussels). More than that, reducing VAT could serve to recognise – and incentivise – businesses that are far less harmful to the planet than linear counterparts.
Above all, making these business models profitable requires more thought. Marie and Isabelle were tenacious in their fight for profitability: they allowed appointments during lockdown, created an e-shop, invested in in drycleaning equipment, and explored alternative investment. Despite this, they never quite found the right recipe to make a rental business work. Could a slicker e-shop roll-out increase volumes? Could outsourced marketing remove a salary? Would using machines (e.g., to determine an outfit’s availability) reduce costs?
Coucou’s journey is inspirational: it shows planet-passionate entrepreneurs will work hard to make new business models succeed, and consumers do seek environmentally sustainable products and services. But its nine-year battle also showcases worrying challenges to textile rental businesses and other circular models. If we are serious about circularity, we need to recognise these challenges and think more intelligently about how to tackle them. We owe it not just to the planet, but to the entrepreneurs investing their livelihoods in these new business models.
