Clothing Retail Businesses

Clothing Retail Businesses

Clothing Retailers and Fast Fashion

Clothing retail businesses specializing in vintage and previously worn clothing have gained traction in the last few years. Similar to technologically innovative companies like “Uber”, “Just Eat”, “Square” and “Stitch Fix”, contemporary retail businesses have started to offer services that allow customers to lease or rent clothing on a temporary basis for a fee. With concerns of limiting the carbon footprint and reducing waste, companies have begun to offer alternatives to “fast fashion”.

Clothing Rental Platforms

Clothing rental companies like Rent the Runway offer monthly rentals, trial subscriptions and unlimited rentals. Rent the Runway’s policies include considerations such as options for exchange, a certain number of garments per month, and return policies. While new businesses such as Rent the Runway offer a number of policies that are seemingly compliant with privacy laws, data laws and various consumer laws, there are a number of compliance regulations that potential clothing rental platforms must consider.

What considerations should clothing rental platforms make?

In addition to creating comprehensive and valid terms and conditions and privacy policies, clothing rental companies should consider registration or incorporation with a provincial or federal registry. If you plan on operating your company in multiple Canadian provinces, you should consider extraprovincially registering your company. If you are wanting to take advantage of corporate tax rates on income tax, incorporating your business might be a more suitable option. Other considerations include:

• Reserving a name for your new business
• Trademarking your business name
• Developing a contract for clothing storage and other business equipment needed
• Developing contracts for various vendors such as packaging vendors, retail mannequin vendors, machine operations vendors, and point of sale vendors.

While the list above is not exhaustive, they are some of the requirements that you should consider prior to creation of a rental retail business.

If you’re a potential retailer with interest in getting started in a rental retail business, get in touch with one of our business attorneys. Call us at 604-930-9578 or 1-800-930-9986. Our experienced counsel are ready to assist you with your rental retail business.