James Caan makes a seven-figure bet on a fashion brand with a 2% return rate

A common online shopping habit is to buy the same item in several sizes and send back the ones that do not work. But U.K. tights and apparel company Snag says better fit from the outset can greatly reduce that waste, and the approach has now attracted backing from a prominent investor.

What happened?

James Caan — known to many from Dragons' Den and as the founder of private equity firm Hamilton Bradshaw — has made a seven-figure investment in Snag, the size-inclusive fashion brand created by entrepreneur Brie Read.

The deal is Caan's first consumer-facing investment in 20 years, as Newsweek reported. Snag says its return rate is about 2%, compared with the roughly 40% level that has become common in online fashion.

The company attributes that number to designing for U.K. sizes 4 to 38 instead of enlarging or shrinking garments from one standard sample size. Since Snag launched in 2018, it has sold more than 3 million products and generated more than £250 million, or about $335 million, in revenue.

That low level of returns was a major factor in Caan's decision to invest.

"The way fashion operates today is under increasing pressure. High return rates erode profitability and create unnecessary waste at scale," he said.

Why does it matter?

The effects of clothing returns extend far beyond a simple retail hassle. Each package sent back can require another shipment, more packing materials, extra handling, and a higher chance that the item will be thrown away instead of sold again. Those added steps increase transport-related air pollution and add to the clothing sector's already large environmental footprint.

Fast fashion intensifies the issue because it relies on huge volumes of inexpensive clothing moving rapidly through the supply chain.

It also affects consumers financially. Cheap clothing can look like a bargain at first, but items that stretch out, pill, or fall apart often need to be replaced again and again, turning short-term savings into a repeated expense.

If clothes fit more people properly on the first order, fewer returns would be needed, which could reduce waste and make shopping less frustrating for customers long underserved by standard sizing.

What's being done?

Snag says it tries to solve the issue before a return is ever made. Instead of using narrow sizing standards driven by manufacturing convenience, the company says it designs from the beginning for a much broader range of body shapes and sizes.

For e-commerce companies, returns are one of the more costly hidden burdens. Reducing them can cut delivery emissions, limit excess packaging, and decrease the number of garments traveling back and forth between customers' homes and warehouses.

Caan is also set to work with Snag's leadership team as the company expands internationally and scales its operations.

"Our model proves that designing for real bodies is better for customers and better for business," Read said.

Caan put it more bluntly: "Snag's ability to operate at around 2 percent returns, compared to an industry average of 40 percent, shows that a different model is not only possible but commercially compelling."

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