The Business of Fashion reported the resignation of CaaStle's founder and CEO Christine Hunsicker. CaaStle provides clothing rental logistics services for high end brands. A letter sent by the CaaStle board stated that Hunsicker:
had given some investors “misstated financial statements and falsified audit opinions, as well as capitalisation information that understated the number of company shares outstanding,” the letter said.“The company is facing a severe and immediate liquidity problem,”
Having Caa in the company's name should have been a warning given Moody's ratings considers Caa1 "judged to be of poor standing and are subject to very high credit risk." Forget the sorry name, what does the company actually do?
Crunchbase reports:
CaaStle is focused on developing systems and methods for managing data associated with wearable items in a clothing subscription service. This includes creating electronic platforms for transactions and inventory sharing, as well as user interfaces for electronic interactions. They are also working on garment size recommendations and optimizing wearable item selection. Additionally, CaaStle is exploring image analysis for apparel and electronic recommendation engines for apparel subscriptions. These efforts aim to enhance the efficiency and user experience of their Clothing as a Service model.What happens if skintech CaaStle does not get another liquidity injection from Bill Ackman?
Who gets the keys to the CaaStle? Maybe nobody, as in the case of fintech Synapse. Marc Andreessen fled from that stinking corpse all the way to Washington, D.C. where he joined the "government as a SERVE US billionaires" model.
Update 4-2-25: Axios reported the depths of Hunsicker's financial chicanery:
Hunsicker last year told prospective investors that CaaStle generated $519 million in 2023 revenue. According to audited financials that the company sent this weekend to shareholders, the actual revenue figure for the year ending Sept. 30, 2023 was only $15.7 million.
Prospective investors also were told that fiscal 2022 revenue was $278 million, when it actually was $19.7 million. Projections for 2024 and 2025 revenue were $793 million and around $1 billion, respectively. Hunsicker also claimed that 2023 EBITDA was $91 million and virtually flat in 2022. The audited financials don't specifically include EBITDA, but do show a combined $135 million net loss for the two fiscal years.
Prospective investors were told that CaaStle had hundreds of millions of dollars in cash as of mid-2024. If so, that's a heck of a trick. It ended Sept. 2023 with less than $1 million in cash and around $3 million in total assets, and then raised just under $60 million in subsequent funding.Hunsicker co-founded other skintech companies which are now fleeing from her dung filled representations. If Marc Andreessen can skate Synapse's debacle, surely Hunsicker can arrange something.
