Fashion-tech startup teeters as CEO resigns over fraud claim

Retail entrepreneur Christine Hunsicker has resigned from her position as chief executive officer of CaaStle after the fashion-technology startup’s board of directors alleged she misrepresented the company’s performance to investors, according to a March 29 letter to shareholders seen by Bloomberg News.

CaaStle faces “a severe and immediate liquidity problem,” and the board is considering options including a possible wind down, liquidation or strategic transaction, according to the letter. The company is planning a two-week-long furlough for its employees. Law enforcement authorities are also investigating the matter and the company is cooperating, the letter said.

Hunsicker didn’t respond to calls and emails seeking comment.

“The performance to date has not matched what Christine claimed — we have learned that Christine provided certain investors with misstated financial statements and falsified audit opinions, as well as capitalization information that understated the number of company shares outstanding,” the letter said.

“The board is deeply disappointed by the conduct that has led to this moment,” a representative for CaaStle said in a separate statement to Bloomberg. “Our immediate focus is on addressing the company’s challenges, supporting our employees, and preserving the value of our technology and business operations.”

The board has appointed George Goldenberg, the firm’s chief operating officer and board member as interim CEO, according to the letter, details of which were first reported by Axios.

Rental services

CaaStle, based in New York, began as Gwynnie Bee Inc. in 2011 and changed its legal name in 2018, according to an auditor’s report attached to the letter. It provides rental subscription services for owned and third-party retailers. The company has retained ICR for restructuring and strategic communications advice, according to a person familiar with the matter, who asked not to be named discussing confidential information. 

Hunsicker also co-founded P180 with Brendan Hoffman, which aims to invest in or acquire brands and retailers to use CaaStle technology, according to a 2024 press release. In January, P180 announced that it had acquired a majority stake in Vince Holding Corp., which operates the Vince brand. It also has a stake in Altuzarra, a luxury brand.