It took Christine Hunsicker 14 years to build CaaStle up into what looked like a pioneering fashion rental service with hundreds of thousands of subscribers and a $1.4 billion valuation.
But it took almost no time at all for the start-up case study to move from helping to buy fashion brands to devolving almost entirely into scandal.
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Hunsicker was working with Brendan Hoffman’s P180 to buy control of Vince Holding Corp. in late January and just two months later was out as CaaStle’s chief executive officer, accused of doctoring financial statements, racking up losses of more than $510 million and more.
The narrative is flipping again, from business breakdown to legal fallout.
Already law enforcement was said to be investigating. Now P180 — which was cofounded by Hoffman and Hunsicker and minority-owned by CaaStle — is arguing in a new federal lawsuit that Hunsicker is more than a solitary bad actor, but the “ringleader of a conspiracy” that violated the Racketeering Influenced and Corrupt Organizations Act, or RICO.
“This case is a tale of lies, betrayal and cover up,” said the P180 suit, which was filed May 27 and also names Jaswinder Pal Singh, George Goldenberg, Scott Callon and Chirag Jain as defendants. They are all tied to CaaStle. A spokesperson for the rental service did not immediately address WWD questions regarding the company or the suit on Tuesday. Hunsicker could not be reached.
The federal case follows similar lines as a New York state suit that P180 filed against CaaStle, but adds more details and implicates more players.
It is still Hunsicker at the center, though.
Hoffman had worked with her before, during his first stint as CEO of Vince, when he dabbled in rental. But it was later, after he left the top job at Wolverine Worldwide in 2023, that Hunsicker made him a real rental believer.
According to the suit, Hoffman came to believe that, “Apparel retailers could reclaim — and perhaps even multiply — their valuation by increasing their marginal gains on discounted merchandise. For years, valuation of apparel companies had declined to be just pennies per dollar of revenue. Hunsicker promised e-commerce scale — specifically, technology and logistics that would enable regular clothing shipments to customers on a massive level — that would allow apparel companies to increase their margin on what otherwise would be discounted merchandise.”
In a nutshell, the premise was that renting out instead of discounting goods that don’t sell at full price would boost margins.
It was a revelation profound enough that Hoffman created P180, marrying his expertise and relationships with Hunsicker’s “self-proclaimed technological and e-commerce prowess,” the suit said.
“What Hoffman did not know — but which eventually has become clear — is that Hunsicker is a world-class fraudster ranking alongside the likes of Bernie Madoff and Elizabeth Holmes,” the suit claimed. “She lied to the world to make it appear that CaaStle was a success, lied specifically to Hoffman about CaaStle and hid CaaStle’s financial data from Hoffman. She presented herself as a skillful and successful entrepreneur who built a robust e-commerce business, raised hundreds of millions of dollars for it and commanded a board of notable leaders in corporate governance.
“Hunsicker, though, did not act alone. She had co-conspirators…with whom she created her house of cards. Hunsicker and her co-conspirators repeatedly stated or implied that CaaStle had a large scale, a huge subscriber base and spectacular financials.”
Instead of “hundreds of thousands of subscribers and hundreds of millions of dollars in revenue, CaaStle itself had just a fraction of those subscribers, barely had any revenue, had supposedly spent hundreds of millions of dollars it received from investors, and had no viable business,” the suit said. “The whole thing was a sham perpetuated by a pattern of persistent lying, obfuscation and, eventually, cover-up.”
The suit repeatedly refers to the alleged conspiracy as “The Hunsicker Enterprise.”
Susan Scafidi, founder and director of the Fashion Law Institute at Fordham Law School, said the complaint “recasts” the scandal, replacing a single mastermind with a conspiracy.
“It appears intended not only to get ahead of a government investigation but also to distribute the blame — and thus the potential financial liability — for alleged extreme financial misrepresentations, and also to tap into the enhanced damages available under RICO,” Scafidi said. “If, as JFK noted, success has many fathers but failure is an orphan, this lawsuit aims to bring in as many key CaaStle players as possible for paternity tests — and the discovery process is likely to be in-depth and painful.
“The concept behind CaaStle was very compelling, and from a social perspective it’s a pity that the circular and sharing economies of fashion seem so hard to monetize. But the big winners here may be the legal teams working to unravel the plot twists,” she said.
There will be plenty to work with.
P180’s suit claims that “The Hunsicker Enterprise” induced it to take self-dealing loans and had money “fraudulently transferred out” of its bank account to both CaaStle and personal accounts.
The alleged conspirators also overstated CaaStle’s capabilities while P180 lined up investments in Vince and Altuzarra.
Separately, CaaStle denied allegations in two cases filed against it in state court, one by a company that owns the name Express over use of the name Express Style Trial and the other by P180.
CaaStle tried to get the state court suit by P180 thrown out, claiming it doesn’t have standing to bring the case. But a P180 spokesperson said, “CaaStle filed a motion to dismiss on a technicality that will soon be remedied and will not prevent the case from moving forward.”
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