Case Study: MUD Lease A Jeans (yes really!)
MUD Jeans: Rethinking the fashion industry
Mud Jeans was formed in by Bert van Son, a 30 year veteran of the fashion industry, on a very simple principle, “What if we all clean up our own mess?”. At the age of 23 Bert moved to China to work in the textile industry and his time there made him see the impact fast fashion has on the environment and its factory workers and made him believe that there is an alternative way…
In 2013 he introduced Lease A Jeans, an innovative approach to offer guilt-free consumption. MUD Jeans allows customers to shop guilt-free and do good for the environment, while looking fashionable and modern. The company won several awards, such as the Sustainability Leadership Award and the Peta Vegan Awards.
What do consumers get out of leasing jeans?
In the words of MUD, "Lease A Jeans is a guilt-free solution for conscious people that have a desire for newness." It's estimated that around 30% of clothes in our wardrobes have not been worn in over a year. Consumers can change their jeans as fashions change without the guilt associated with throwing away a perfectly usable item of clothing.
Leasing can be more affordable, instead of paying anywhere up to £150 for a pair of designer jeans, a monthly payment of €7.50 be much easier to find.
Consumers get to feel that they are part of a pioneering movement, changing the world for the better. MUD are very consciously positioning themselves as the hub of a "community of forward-thinking people... true pioneers, visionaries and changemakers."
How does it work?
Instead of purchasing the jeans, in the usual way, Mud offer consumers to option to Lease Jeans for €7.50 / month.
After 12 months they can choose one of 3 paths;
- Keep the jeans for as long as they like;
- Switch the jeans for a new pair, and continue leasing for another year;
- Send the jeans back to MUD and get a €10 voucher for a new purchase.
What does the business get out of leasing jeans?
Like many other commodities, cotton prices have become more volatile in in recent years and have increased by over 180% in the last 15 years, at once stage in 2011 peaking at +480% compared with the 2002 price.
Mud Jeans are made with up to 40% recycled content but that still leaves 60% of the material as virgin cotton, subject to the volatility of the market. This is further amplified for MUD as they use organic cotton, which suffers from even more exaggerated price fluctuation and supply disruption due to the extra focus on the provenance of the material.
Realising the vulnerability of their supply chain, van Son decided they could make more effective use of the material they had already purchased by taking back jeans at the end of their life and recycling them. After learning about different business models, such as Rolls Royce's "Power by the hour" and Turntoo, in which consumers pay for performance rather than for a product, he realised that the best way to maintain control over his products, and to ensure he could recover the materials used to make them, was to avoid selling them in the first place.
So he decided to start leasing jeans, instead of selling them, and he built a business model that made it easy and financially beneficial for consumers to return their jeans when they had finished with them.
This brings the business a number of benefits, including;
- better control over input costs
- a long-term revenue stream with much higher customer retention
- turns consumers into a community of fans who are passionate about the goals and values of the business