Generally, it is the practice to lease durable goods and that also related to industrial or corporate use like vehicles, heavy machinery, office or factory spaces etc. However, in view of increasing cost of living and high prices of durable consumer goods, the practice of payment through installments (with or without interest) is quite established everywhere. We also occasionally hear people making statements – either out of frustration or for fun – that the days are not far off when we will have to buy our clothes also in installment. The possibility of this now seems to be real. In fact, The Netherlands based entrepreneur Burt van Son, who makes ‘Mud Jeans’ has started offering his product on lease basis. The idea behind this scheme is to popularize sustainability as well as affordability. Instead of buying and owning a pair of jeans for life, one can take ‘Mud Jeans’ on lease on a monthly charge (sort of rent), keep them for a year and then send them back for recycling so that you can try something new and be updated with style and fashion without paying the full price of ‘Mud Jeans’. Burt van Son believes that this will also help consumers to reduce unnecessary expenditure on clothes. This way, he hopes to increase the number of his loyal customers and continue to own the jeans after their use. These jeans can then become his raw material for making jeans from the recycled material.
Burt van Son’s business model is to take one-time charge of 20 Euros fee from customers which covers shipment and administrative expenses, and then charge 5 euros a month for a year (80 euros in total). A free repair service is offered during the period of the lease contract. At the end of the one year contract, customers are given three options. They can return the jeans back. They can get a new pair, paying a reshipment cost and the lease fee. Or, they can choose to keep the jeans, paying another four months at 5 euro plus a further 20 euro deposit. That goes towards another pair, when they eventually take one. According to Van Son, several hundred people in Amsterdam have signed up under his lease scheme. At present Mud Jeans are available in ladies and men’s models, they are available in three washings. Two denim blazers for women and a pair of white jeans for men are also available under the lease program.
Needless to say (looking to the total cost involved in wearing the Mud Jeans), the jeans are made of a high-end organic cotton from Turkey. According to Van Son, this quality is “quite expensive” and hard to source. Van Son claims that at present he is using about 40% recycled, or off-cut, material but eventually he plans to increase it to about 50%, if his leasing scheme succeeds. He says that it’s not possible to go fully recycled, as long, virgin, strands are needed initially. When the jeans come back from the users, they are either washed, repaired, and put back into service, or shredded and sent back to the factory.
So, what next? I feel that if our bankers come to know about this then certainly they will tie-up with jeans manufacturers to offer consumers some attractive schemes to pay off the monthly lease fee. Of course, they will ask us to hypothecate our entire wardrobe for this facility.
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