As Vow To Be Chic shutters, Zola raises $100M more

Dive Brief:

Bridesmaid gown rental startup Vow To Be Chic is shuttering operations after five years, CEO Kelsey Doorey told The Knot. According to a company email to customers on Wednesday, the primary reason for shuttering its operations is due to a lack of capital. "Sadly, our capital constraints mean we have no choice but to stop operations today," the email said, according to The Knot.
For now, the company's website is still operational, although a small banner at the top notes that all dresses have been booked for the year. Rent the Runway, which also offers rentals in the category, swooped in on the news Thursday, offering Vow to Be Chic customers via Twitter 50% off bridesmaid dresses and packages.
Meanwhile, wedding registry startup Zola, has garnered $100 million in Series D funding, Techcrunch reports. The company, which is also five-years-old, was launched by CEO Shan-Lyn Ma, a former executive of e-commerce companies Gilt Groupe and Chloe + Isabel.

Dive Insight:

Doorey launched Vow To Be Chic five years ago after graduating from business school and attending many weddings as a bridesmaid. During its short stint, Doorey told The Knot that they rented out dresses to tens of thousands of women and collectively saved them $6 million. But ultimately the company's demise all came down to funding — the linchpin to keeping any startup running.

While investors may not have been confident in the Vow To Be Chic model, they haven't shied away from rental apparel or wedding startups. Zola's newest series of funding brings its total investment to $140 million from investors like Comcast Ventures, NBCUniversal and Goldman Sachs Investment Partners. And Rent The Runway has raked in $210 million from a variety of investors, including a recent $20 million from Alibaba founders Jack Ma and Joe Tsai's financial firm Blue Pool Capital.

But the bridal business has become trickier in recent years as consumer tastes have changed. J. Crew two years ago shuttered its bridal effort, which had attempted to cater to a movement by more American brides who were turning away from hefty splurges for simpler styles, and last year longstanding bridal retailer Alfred Angelo also shut down. More recently, Weddington Way, acquired in 2016 by Gap Inc., is in the midst of closing all its test stores and it's not clear if it will remain as an online-only retailer.

It's a tiny ($2.5 billion), highly competitive market dominated by local, independent players, according to Shelley Kohan, a professor at the Fashion Institute of Technology, and that shrinks further when the specialty is bridal apparel. "When focusing solely on bridesmaids dresses and accessories, the market for bridal stores shrinks to less than $1 billion and would prove difficult to scale at the trajectory needed for positive financial impact for Gap Inc.," she told Retail Dive in an email earlier this year, adding that its move is "not a surprise."

Retailers H&M, Asos and ModCloth have also entered the market, rolling out lines of wedding and bridesmaid dresses that are cheaper and more quickly available, and Urban Outfitters has aligned its BHLDN wedding brand with Anthropologie, where Kohan sees good synergy.