Fashion Reins In Consumption by Designing In Circularity

From the treasure troves of vintage thrift stores to the bottom of your Mom’s wardrobe, it can be incredibly satisfying to give pre-loved clothing a second-life, as opposed to trawling the racks of high-street stores. The revival of clothing from yester-year is also more environmentally friendly, and is driving consumers to marketplaces such as eBay, Vestiaire Collective and ThredUp in rising numbers.

As younger consumers in particular take account of the environmental impact of their purchasing decisions, and the dollar to be made from selling their old clothes, brands from H&M to Patagonia are realizing the added benefits of playing their part in resale. After all, if they were the original retailer of a pair of jeans or similar, why not cash in on the second time it gets sold?

Decoupling growth from emissions

For H&M, resale is a key part of the puzzle as it seeks to achieve its goal of doubling sales by 2030, while simultaneously halving its carbon footprint. The $2.7 billion-valued retailer is a majority shareholder in online resale marketplace Sellpy and directs its online customers to the Sellpy website in seven markets. Offering repair services in some stores, collection points for old garments and increasing recycled materials in its clothing lines, all play into the mix too.

“We see rising interest in the environmental and social impact of fashion, particularly from younger buyers,” Leyla Ertur, head of sustainability at H&M Group, told BloombergNEF. The longer a product’s lifecycle, the lower its resource intensity, so H&M’s work with resale and rental models helps to reduce its environmental impact as a whole, she said.

Between 50% and 60% of the 140,000 metric tons of textiles collected in H&M’s garment collection service since 2013 has been directed to re-use and re-wear purposes, Ertur said. Any profit made from the service goes into researching innovative materials. Materials startups supported by the brand’s investment arm include Renewcell, Worn Again and Infinite Fiber — all of which tackle textile waste-recycling in different ways. “Our size and scale helps these companies to scale up and become commercially viable,” Ertur said.

H&M also provides a platform for early-stage materials companies to test out their materials in the real world. For example, Renewcell’s innovative material ‘Circulose’ was used in fashion retail for the first time in a dress for H&M’s Conscious Exclusive collection. Over time, H&M plans to make these innovative materials available in its broader collections too, Ertur said.

The business of secondhand clothing retailer Thrift+ grew eight times in gross merchandising value in 2020, as wardrobe clear-outs took off during the pandemic and consumers became increasingly concerned with environmental impact. Thrift+ aims to provide a “simple, positive alternative to fast fashion” by allowing consumers to sell their old clothes, raise money for charity, and buy quality-checked, secondhand fashion on its curated website, Miranda Essex, head of growth at the U.K.-based company, said.

“We want to make it easy for existing fashion retailers to move into circularity” through powering secondhand online stores and providing brands with data around the kinds of styles and fabrics that sell best secondhand, Essex told BNEF. Data such as this can help designers consider resale from the outset, which in turn, can help to drive repeat sales and loyalty, she said. Partners to work with Thrift+ so far include French Connection, Monsoon and FatFace. “By not participating in resale, brands lose out on capturing any of the resale value on marketplaces such as eBay,” Essex said.

High-street brands ASOS and Inditex’s Zara are some of the top-selling brands on the Thrift+ website, but designer brands such as Gucci and Marc Jacobs are sold there too. There is a “displacement value” of shopping secondhand, whereby consumers typically buy less items new than they would have previously done, and it can also widen access to more premium-quality garments, Essex said. Thrift+ sells about 70% of the stock it lists at anywhere from 20-70% of the original retail price. All unsold items are diverted to recycling or charity, Essex said. With an average item selling price of 15 pounds ($20), Thrift+ is more mass-market than peers such as Vestiaire Collected and Farfetch.

Rent don’t buy

Rent the Runway’s business model has broadened in relevance since the impact of Covid-19 led women to increasingly favor casualwear as they worked from home and attended less in-person events, Anushka Salinas, president and chief operating officer, told BNEF. The company launched in 2009 by co-founders at Harvard Business School primarily focused on renting clothes to women for special occasions. Sustainability is now one of the top five reasons cited by consumers for renting clothes from the designer clothing website, which operates via subscription or one-time rental.

“Driving greater utilization of clothing over time delivers better environmental outcomes, and that is aligned with our bottom line,” Salinas said. The U.S.-based company, which went public in October 2021, has a ‘garment science team’ focused on increasing garment lifetime, a repairs function, and shares data with designers about which fabrics and designs stand the test of time. On average, an item of clothing gets sent out to 20 different rental customers before it is resold, recycled or donated to charities, although that figure varies significantly across clothing types. Rent the Runway displaced the need for new production of 1.3 million garments from 2010-19, according to a life cycle assessment completed by the company in 2020. The study found that Rent the Runway’s rental model results in a 24% reduction in water usage, 6% reduction in kWh of energy usage and 3% reduction in pounds of CO2 emissions, compared to buying clothes new, on a weighted average basis per garment.

“Some 89% of subscribers say they buy fewer clothes than they did prior to joining Rent the Runway,” so our business model clearly drives change in customer behavior, Salinas said.

Rental and resale models are particularly suited to use cases such as maternity wear, special occasions and childrenswear, said Geoff van Sonsbeeck, chief executive of House of Baukjen. The U.K.-based retailer offers a rental subscription service for its maternity wear brand Isabelle Oliver, and both rental and resale for womenswear brand Baukjen. High-quality clothing is vital to making these models work, van Sonsbeeck told BNEF. “I’m not doing this because it is demand-led but to show people an alternative solution to how we consider consumption… to avert landfill and to keep garments in circulation for as long as possible,” he said.

Recycling made simple

There is a growing opportunity to “engage consumers in a circular model” as we move into an environment of access over ownership, said Kristy Caylor, chief executive and co-founder of clothing retailer For Days. The U.S. retailer sells clothing predominantly made from mono materials such as organic cotton for ease of recycling at end-of-life. The aim is to “present circularity to consumers as an easy shift”, with affordable and attractive clothing, while developing an economical business model to recapture and regenerate product, Caylor told BNEF.

Caylor was inspired to create a more sustainable clothing model after seeing first-hand the heavy environmental and social impact of the fashion industry while working at large brands such as GAP. The rental and resale model can only go so far in curbing the industry’s vast footprint, because a large part of the clothing market, like underwear and swimwear, does not quality for that use case, she said. Instead, For Days offers clothing that can be mechanically recycled, even if a small amount of virgin fiber must be introduced while doing so. Its customers receive a small credit in return for recycling their clothes with the company, and it also offers a take-back program for all clothing, regardless of brand, which has been “very powerful from an acquisition and retention perspective,” Caylor said.

Cotton to cotton

Going one step further on the recycling journey is startup EVRNU, whose chemical recycling technology can break down 95% of all fibers in the textile industry today, it told BNEF. The launch last week of its material NuCycl r-lyocell, made entirely from cotton waste in a premium t-shirt sold by designer Carlos Campos, marks the first time that its material will be available to consumers.

“Our new cellulose-based material is very strong — so can replace nylon and polyester — and can be recycled up to 10 times, as well as being biodegradable under the right conditions,” said Stacy Flynn, co-founder and chief executive of Evrnu. There is enough waste cotton discarded today to feed all new clothing production globally, but to access this textile waste will require vast improvements in recycling supply chains, she told BNEF. Nucycl could be made to imitate many different materials — from jeans to shoe uppers — and it can also be made from any cellulose-based feedstock, from seaweed to crop waste, she said.

Evrnu’s goal is to license out its NuCycl technology to large-scale manufacturers such as Birla and Lenzing, which currently hold about half the market for man-made cellulosics, said Flynn. NuCycl r-lyocell is just the start — Evrnu’s next technology will be a “blend separation of cotton and polyester” as the company tries to trigger a fashion industry revolution.
A key challenge with chemical recycling is that it requires pure streams of feedstock to work efficiently, so Evrnu has developed a robotized mechanical sorting system that can identify fiber content with up to 0.1% accuracy and can sort 2-3 metric tons an hour, it told BNEF. Separating out different fibers from one another is 20-30% cheaper than working with mixed blends, Flynn said.

The U.S.-based company expects to reach cost parity with standard manmade cellulosic fibers such as lyocell at the 100,000 metric ton-level, which will be its second or third production facility. Investors include Closed Loop Partners, Bestseller and PDS Multinational.

You don’t get very far in having anti-consumption conversations with brands, said Flynn, who previously worked for Target and DuPont. “The trick here is to redesign specific nodes of the problem to create wide-sweeping benefits: When we approach a brand or retailer, we ask them to change just one thing – we specify the use of a new fiber for the creation of a product and help them to design that product for disassembly. And by doing that, we use the power of their supply chain to start reducing the impact of fashion on natural resources.”

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